CFD Trading Rate Australian Dollar vs US Dollar (AUDUSD)

• AUD/USD sees a brief up lift following higher trimmed mean CPI out of Australia in October. 
• Figures showed headline CPI at multi-year lows but this was put down to lower energy and fuel prices. 
• Further gains result from a slight increase in bets the Federal Reserve will cut rates in December. 

AUD/USD bounces within a prolonged downtrend to trade in the 0.6870s on Wednesday after the release of Australian inflation data fails to change the widespread view that the Reserve Bank of Australia (RBA) will keep its “arms folded” at the next meeting, leaving its cash rate unchanged at a comparatively high 4.35%.  

AUD/USD Daily Chart 

The differential between central bank interest rates is a key driver of FX valuations, with central banks that have – or are expected to keep – interest rates relatively high compared to their peers seeing an appreciation in their country’s currencies. 

AUD/USD is trading higher on Wednesday because unlike the RBA, the US Federal Reserve (Fed) is increasingly seen as likely to cut its key interest rate by 25 basis points (bps), or 0.25%, to a range of 4.50% – 4.75% at the Bank’s December policy meeting. Further, the US central bank has already cut by 75 bps this year whilst the RBA has not lowered rates at all. 

The CME FedWatch tool calculates the probability of the Fed cutting by a quarter of a percentage point in December as 66.5% on Wednesday, up from the circa 56% at the beginning of the week. 

Although still higher than the RBA rate, the greater likelihood of the Fed cutting is mildly supportive of the Australian Dollar (AUD) and AUD/USD. 

AUD/USD’s downtrend since the beginning of October has been due to a radical change in market expectations about the trajectory of interest rates in the US. Prior to October these had been for the Fed to lower interest rates aggressively but robust US economic data led to a revision of these expectations. The outcome of the US Presidential election was a further factor supporting the pair. 

Australian CPI data fails to encourage AUD

Data out overnight showed the Australian monthly Consumer Price Index (CPI) remained at 2.1% in October – the same as September – and lingering at three-year lows. This was below the 2.3% forecast by economists. 

The Trimmed Mean CPI, however, rose by 3.5% in October from 3.2% in the previous month. 

In addition, most of the weakness in price growth of the headline 2.1% figure was put down to falling energy prices due to the ongoing impact of the Energy Bill Relief Fund rebate. The data showed that energy prices as a subcomponent fell 35.6% in October. Lower global Oil prices also impacted headline inflation as petrol prices fell by 11.5%. 

Since these factors are seen as transitory and not as representative of underlying inflation, the RBA is seen as unlikely to respond to them by lowering interest rates. 

Although the headline CPI data failed to meet expectations the rise in trimmed mean CPI meant there was no change to the outlook for the RBA’s cash rate or the AUD. 

Indeed, the RBA focuses more on the quarterly inflation figures, according to analysts at Brown Brothers Harriman (BBH) when it decides policy. 

“It’s worth noting that the RBA focuses on the quarterly CPI prints because it’s less volatile and captures more items than the monthly CPI indicator. RBA cash rate futures continue to imply a first full 25bps rate cut to 4.10% in May (2025),” said Elias Haddad, Senior Markets Strategist at BBH. 

The view was echoed by analysts at Societe Generale, who see no change in the cash rate at the RBA’s December meeting. 

“The wait for lower rates in Australia continues and the RBA will sit on the fence until 2Q25 after another disappointing inflation print. Core CPI picked up to 3.5% YoY in October,” said Kenneth Broux, a senior FX strategist with the French lender. 

Downward momentum has eased; the Australian Dollar (AUD) is likely to trade in a range between 0.6440 and 0.6500. In the longer run, AUD must break and hold below 0.6440 before a move to 0.6400 can be expected, UOB Group’s FX analyst Quek Ser Leang and Lee Sue Ann note.

Downward momentum has eased

24-HOUR VIEW: “After AUD dropped sharply early yesterday, we pointed out that ‘downward momentum is beginning to build.’ We indicated, AUD ‘could break below 0.6440, but it might not be able to maintain a foothold below this level.’ We also indicated that ‘To sustain the momentum buildup, AUD must remain below 0.6510 (minor resistance is at 0.6490).’ AUD subsequently dropped to 0.6434, rebounding strongly to 0.6508. AUD closed at 0.6474 (-0.47%). Downward momentum appears to have eased with the strong rebound. In other words, AUD is likely to trade in a range today, probably between 0.6440 and 0.6500.”

1-3 WEEKS VIEW: “Yesterday (26 Nov), when AUD was at 0.6470, we highlighted that it ‘must break and hold below 0.6440 before a move to 0.6400 can be expected.’ We added, ‘The likelihood of AUD breaking clearly below 0.6440 will increase in the next few days, provided that 0.6525 is not breached.’ While AUD subsequently broke below 0.6440, it rebounded from 0.6434 to close at 0.6474. We continue to hold the same view for now.”

Downward momentum is building; the Australian Dollar (AUD) could break below 0.6440 but might not be able to maintain a foothold below this level. In the longer run, AUD must break and hold below 0.6440 before a move to 0.6400 can be expected, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.

Below 0.6440 a move to 0.6400 can be expected

24-HOUR VIEW: “We indicated yesterday that AUD ‘could advance above 0.6560 but is unlikely to reach the major resistance at 0.6600.’ Our view was incorrect, as AUD dropped from 0.6550 to 0.6487, closing largely unchanged at 0.6504 (+0.07%). In early Asian trade, AUD dropped sharply. The sharp decline has led to a buildup in momentum. AUD could continue to decline, possibly breaking below 0.6440. That said, it might not be able to maintain a foothold below this level. To sustain the momentum buildup, AUD must remain below 0.6510 (minor resistance is at 0.6490).”

1-3 WEEKS VIEW: “Last Wednesday (20 Nov, spot at 0.6530), we indicated that AUD could rebound to 0.6560, possibly 0.6600. After AUD struggled to extend its advance, we indicated last Friday (22 Nov, spot at 0.6510) that it ‘has not been able to make any headway on the upside.’ We added, ‘if AUD breaks below 0.6470 (‘strong support’ level), it would indicate that it is not rebounding further.’ Early today, AUD fell sharply, and broke below 0.6470. Upward momentum has faded. Although downward momentum is beginning to build, it is not enough to suggest a sustained decline. AUD must break and hold below 0.6440 before a move to 0.6400 can be expected. The likelihood of AUD breaking clearly below 0.6440 will increase in the next few days, provided that 0.6525 is not breached.”

• AUD/USD dropped to a fresh multi-month trough after Trump’s tariff threats on Tuesday.
• Bets for slower Fed rate cuts lift the US bond yields and the USD and also exert pressure. 
• Bears take a brief pause for a breather and look to FOMC minutes before placing fresh bets.

The AUD/USD pair struggles to capitalize on its intraday bounce from the 0.6435-0.6430 area, or its lowest level since August 5 touched earlier this Tuesday and keeps the red through the first half of the European session. Spot prices currently trade around the 0.6480 region, down for the second straight day, and seem vulnerable amid renewed US-China trade war fears.

US President-elect Donald Trump threatened to impose a 25% tariff on all products coming into the US from Mexico and Canada and an additional 10% tariff on all Chinese imports. This, in turn, tempers investors' appetite for riskier assets and turns out to be a key factor undermining the China-proxy Australian Dollar (AUD), which, so far, has failed to benefit from the Reserve Bank of Australia's (RBA) hawkish stance. Apart from this, the emergence of some US Dollar (USD) buying adds credence to the near-term negative outlook for the AUD/USD pair. 

Scott Bessent's nomination as the US Treasury secretary did provide a temporary respite to US bond investors amid concerns that Trump's expansionary policies will reignite inflation and force the Federal Reserve (Fed) to cut interest rates slowly. This, in turn, triggers a fresh leg up in the US Treasury bond yields and assists the USD to attract fresh buyers following the overnight slide. Furthermore, geopolitical risks should offer support to the safe-haven Greenback and support prospects for a further depreciating move for the AUD/USD pair. 

Traders, however, seem reluctant to place aggressive bets and opt to wait for the FOMC meeting minutes for cues about the future rate-cut path. Apart from this, Tuesday's economic docket also features the release of the Conference Board's Consumer Confidence Index, New Home Sales data and the Richmond Manufacturing Index. The data might influence the USD and provide some impetus to the AUD/USD pair. The focus will then shift to the Australian consumer inflation figures, due for release during the Asian session on Wednesday.

• AUD/USD gives up a majority of intraday gains while the US Dollar remains on the backfoot.
• The US Dollar weakened as US Trump nominated veteran hedge-fund manager Bessent as Treasury Secretary.
• Investors await the monthly Aussie inflation data for fresh RBA interest rate guidance.

The AUD/USD pair surrenders a majority of its intraday gains after facing selling pressure near the intraday high of 0.6550 in Monday’s North American session. The Aussie pair drops even though the US Dollar (USD) wobbles near the intraday low, suggesting that the Australian Dollar (AUD) is also performing weakly.

The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, corrects to near 106.80 after posting a fresh two-year high of 108.00 on Friday.

The Greenback had a negative start at the open on Monday as President-elect Donald Trump chose hedge-fund manager Scott Bessent as Treasury Secretary. The market reaction to the news appeared positive for risky assets while the US Dollar and bond yields were hit badly.

However, analysts at MUFG commented that Monday's dollar depreciation is a temporary correction after Friday's steep gains. Bessent has indicated "a possible more balanced approach" to trade tariffs. However, this won't change prospects of the United States (US) economy performing much better than others.

This week investors will focus on the US Personal Consumption Expenditure Price Index (PCE) data for October to get fresh interest rate guidance, which will be published on Wednesday. Investors will pay close attention to the core PCE inflation data, a Federal Reserve’s (Fed) preferred inflation gauge, which is estimated to have grown by 2.8%, faster than 2.7% in September.

Meanwhile, the Australian Dollar (AUD) will be guided by the monthly Consumer Price Index (CPI) data for October, which will be published on Wednesday. Economists estimate the inflation data to have risen at a faster pace of 2.3% from 2.1% in September. The inflation data will significantly influence market expectations for Reserve Bank of Australia (RBA) interest rate path. Currently, the RBA is expected to leave its Official Cash Rate (OCR) unchanged at 4.35% by the year-end.

The Australian Dollar (AUD) could advance above 0.6560 but is unlikely to reach the major resistance at 0.6600. In the longer run, if AUD breaks below 0.6470, it would mean it is not rebounding further, UOB Group’s FX analyst Quek Ser Leang and Lee Sue Ann notes.

Below 0.6470, AUD not to rebound further

24-HOUR VIEW: “When AUD was at 0.6510 last Friday, we noted that ‘The price action still appears to be part of a range trading phase.’ We expected AUD to ‘trade in a range of 0.6490/0.6535.’ AUD then traded between 0.6472 and 0.6521, closing at 0.6500. It opened higher in Sydney trade today. Today, AUD could advance above 0.6560 but is unlikely to reach the major resistance at 0.6600. Support levels are at 0.6520 and 0.6500.”

1-3 WEEKS VIEW: “Last Wednesday (20 Nov, spot at 0.6530), we indicated that AUD could rebound to 0.6560, possibly 0.6600. After AUD struggled to extend its advance, we indicated last Friday (22 Nov, spot at 0.6510) that it ‘has not been able to make any headway on the upside.’ We added, ‘if AUD breaks below 0.6470 (‘strong support’ level), it would indicate that it is not rebounding further.’ AUD subsequently dipped briefly to 0.6472. Given that our ‘strong support’ level at 0.6470 has not breached, we will maintain our view for now. That said, AUD opened and traded on a strong note today, and the short-term momentum appears to be building again.”

• AUD/USD edges higher to 0.6540 in Monday’s early Asian session, up 0.66% on the day. 
• The US S&P Global Composite PMI climbed to 55.3 in November's flash estimate vs. 54.1 prior. 
• Australia’s flash Judo Bank Composite PMI surprisingly contracted in November.

The AUD/USD pair attracts some buyers to near 0.6540 during the early Asian session on Monday. The US Dollar Index (DXY) declines slightly after reaching a new two-year high despite the strong US S&P Purchasing Managers Index (PMI) data. Later on Monday, the US Chicago Fed National Activity Index for October and the Dallas Fed Manufacturing Business Index for November will be released. 

The upbeat US November PMI failed to boost the Greenback. Data released by S&P Global showed on Friday that the US S&P Global Composite PMI climbed to 55.3 in November's flash estimate from 54.1 in October. Meanwhile, the Manufacturing PMI improved to 48.8 in November versus 48.5 in October but remains in contraction. The Services PMI rose to 57.0 in November from 55.0 in the previous reading, beating the estimation of 55.3. 

However, the rising expectation of less aggressive rate reductions from the Federal Reserve (Fed) might support the USD. Futures traders are now pricing in 50.9% odds that the Fed will cut rates by a quarter point, down from around 69.5% a month ago, according to data from the CME FedWatch Tool. 

On the Aussie front, the Australian flash Judo Bank Composite PMI surprisingly contracted in November, falling to 49.4 in November versus 50.2 prior. A figure below the 50.0 threshold is considered a contraction in economic activities. The Manufacturing PMI improved to 49.4 in November from 47.3 in October, while the Services PMI eased to 49.6 in November from the previous reading of 51.0. 

• AUD/USD rebounds to near 0.6500 but the outlook remains bearish.
• Trump’s economic agenda is expected to boost US inflation and economic growth.
• A fresh escalation in the Russia-Ukraine war has dampened the risk-appetite of investors.

The AUD/USD pair recovers more than half of its intraday losses and rebounds to near the psychological figure of 0.6500 in Friday’s European session. The Aussie pair bounces back as the US Dollar (USD) surrenders a majority of its intraday gains after refreshing two-year high. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, gives up gains after facing selling pressure near 108.00 but still holds higher.

The bullish trend in the US Dollar remains intact as investors expect the current policy-easing cycle of the Federal Reserve (Fed) will be shallower than what market participants had anticipated earlier. Market experts believe that price pressures and economic growth in the United States (US) economy could accelerate when President-elect Donald Trump will take the office. Trump mentioned, in his election campaign, that he will raise import tariffs and lower taxes.

In Friday’s session, investors will focus on the flash S&P Global Purchasing Managers’ Index (PMI) data for November, which will be published at 14:45 GMT. The report is expected to show that the overall business activity expanded at a faster pace. Investors will also pay close attention to how businesses are reacting to rate cuts and Trump’s victory.

Meanwhile, a fresh escalation in Russia-Ukraine war has also improved the US Dollar’s appeal as safe-haven. Russia launched intercontinental ballistic missiles on Ukraine in response to their attack over the week by the United Kingdom (UK) and the US-supplied missiles. This has dampened market sentiment significantly.

In the Australian region, flash JUDO Bank Composite PMI surprisingly contracted in November. The index showing overall private business activity declined to 49.4 from 50.2 in October due to weakness in the services sector. A figure below the 50.0 threshold is considered as contraction in economic activities.

The Australian Dollar (AUD) is expected to trade in a range of 0.6490/0.6535. In the longer run, if AUD breaks below 0.6470, it would mean it is not rebounding further, UOB Group’s FX strategists Quek Ser Leang and Lee Sue Ann note.

AUD has a chance of breaking below 0.6470

24-HOUR VIEW: “Yesterday, we expected AUD to trade between 0.6485 and 0.6535. AUD subsequently traded in a narrower range than expected (0.6498/0.6532), closing largely unchanged at 0.6511 (+0.09%). The price action still appears to be part of a range trading phase. Today, we expect a range of 0.6490/0.6535.”

1-3 WEEKS VIEW: “In our most recent narrative from two days ago (20 Nov, spot at 0.6530), we highlighted that ‘the current price action is part of a rebound that could reach 0.6560, possibly 0.6600.’ AUD has not been able to make any headway on the upside. From here, if AUD breaks below 0.6470 (‘strong support’ level previously at 0.6460), it would indicate that it is not rebounding further.”

The Australian Dollar (AUD) is expected to trade between 0.6485 and 0.6535. In the longer run, current price action is part of a rebound that could reach 0.6560, possibly 0.6600, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.

Current price action is part of a rebound

24-HOUR VIEW: “We expected AUD to ‘rise further to 0.6560’ yesterday. However, AUD pulled back sharply from a high of 0.6545 to 0.6485, before recovering to close at 0.6506 (-0.40%). The current price movements are likely part of a range trading phase. Today, we expect AUD to trade between 0.6485 and 0.6535.”

1-3 WEEKS VIEW: “Our update from yesterday (20 Nov, spot at 0.6530) remains valid. As highlighted, ‘the current price action is part of a rebound that could reach 0.6560, possibly 0.6600.’ We will maintain the same view as long as AUD remains above 0.6460 (no change in ‘strong support’ level).”

• AUD/USD regains positive traction following the overnight pullback from a one-week top. 
• A softer USD and a positive risk tone benefit the Aussie amid the RBA’s hawkish stance.
• Traders look to the US macro data and the Fed speaks for some meaningful opportunities. 

The AUD/USD pair attracts some dip-buyers on Thursday and sticks to its modest intraday gains, around the 0.6520 area during the first half of the European session. The uptick is sponsored by a softer tone surrounding the US Dollar (USD), though lacks bullish conviction and warrants some caution before positioning for an extension of the recent bounce from a three-month low touched last week. 

The USD bulls opt to move to the sidelines and look for more clarity on US President-elect Donald Trump's proposed policies before placing fresh. Moreover, the initial reaction to Russian President Vladimir Putin's approval to lower the threshold for nuclear strikes on Tuesday turned out to be short-lived after comments from Russian and US officials eased concerns about a nuclear war. This, in turn, remains supportive of the upbeat market mood, which further seems to undermine the safe-haven buck and benefits the risk-sensitive Aussie. 

Furthermore, the Reserve Bank of Australia's (RBA) hawkish stance offers additional support to the Australian Dollar (AUD). In fact, the minutes of the November RBA meeting released earlier this week indicated that the board members remained vigilant to upside inflation risks and stressed the importance of maintaining a restrictive monetary policy. Meanwhile, expectations for a less dovish Federal Reserve (Fed) should continue to act as a tailwind for the USD and hold back traders from placing aggressive bullish bets around the AUD/USD pair. 

In fact, the markets are now pricing in just over a 50% chance that the US central bank will lower borrowing costs by 25 basis points in December amid expectations that Trump's taunted tariffs and tax cuts could reignite inflation. The outlook remains supportive of elevated US Treasury bond yields and supports prospects for the emergence of some USD dip-buying. This, in turn, should contribute to capping the upside for the AUD/USD pair. Traders now look to the US macro data and speeches by influential FOMC members for a fresh impetus.

• AUD/USD falls sharply to near 0.6500 due to a strong recovery in the US Dollar.
• Market expectations for Fed rate cuts in December have slightly eased.
• AUD/USD falls back after failing to climb above 38.2% Fibo retracement at 0.6535.

The AUD/USD pair drops sharply to near the psychological support of 0.6500 in the North American trading session on Wednesday. The Aussie pair weakens as the US Dollar (USD) bounces back strongly as traders doubt whether the Federal Reserve (Fed) will cut interest rates again in the December meeting. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, rebounds to near 106.60.

The probability of the Fed cutting interest rates by 25 basis points (bps) to 4.25%-4.50% in December has diminished to 56% from 83% a week ago, according to the CME FedWatch tool.

Market speculation for Fed interest rate cuts in December has slightly diminished as investors expect President-elect Donald Trump’s economic agenda will boost United States (US) inflation and economic outlook.

The Australian Dollar (AUD) performs weakly even though the Reserve Bank of Australia (RBA) is expected to keep interest rates unchanged at 4.35% by the year-end. RBA Governor Michelle Bullock maintained hawkish guidance in her remarks in the press conference after the policy decision on November 5, remaining cautioned about upside risks to inflation.

AUD/USD retreats after failing to extend recovery above 38.2% Fibonacci retracement around 0.6535. The Fibo tool is plotted from the November 7 high of 0.6688 to the November 14 low of 0.6440 on an hourly timeframe. The asset wobbles around the 50-day Exponential Moving Average (EMA) near 0.6500.

The 14-day Relative Strength Index (RSI) oscillates in the 40.00-60.00 range suggesting a sideways trend.

A decisive recovery move above the intraday high of 0.6545 could push the asset towards the round-level resistance of 0.6600, followed by the November 5 high of 0.6645.

In an alternate scenario, the pair could witness a downside after sliding below the November 14 low of 0.6440, which would drag the asset toward the round-level support of 0.6400 and the August low of 0.6348

AUD/USD hourly chart

• AUD/USD attracts some intraday sellers after touching a one-week high on Wednesday.
• Rebounding US bond yields revive USD demand and exert some pressure on the pair. 
• The RBA’s hawkish tilt and a positive risk tone could help limit losses for the Aussie.

The AUD/USD pair retreats from the vicinity of mid-0.6500s, or a one-week high touched earlier this Wednesday and extends its steady intraday descent through the first half of the European session. The downward trajectory drags spot prices to a fresh daily low, around the 0.6515 region in the last hour and is sponsored by the emergence of some US Dollar (USD) dip-buying.

The US Treasury bond yields rebound swiftly after the overnight sharp fall amid the growing conviction that US President-elect Donald Trump's expansionary policies will boost inflation and limit the scope for the Federal Reserve (Fed) to cut rates. Apart from this, the worsening Russia-Ukraine conflict turns out to be another factor underpinning the safe-haven buck, which, in turn, is seen exerting some downward pressure on the AUD/USD pair. 

Meanwhile, the initial market reaction to Russia's announcement that it would lower its threshold for a nuclear strike faded after comments from Russian and US officials eased concerns about the onset of a full-blown nuclear war. This is evident from a generally positive tone around the equity markets, which could act as a headwind for the safe-haven Greenback and help limit the downside for perceived riskier currencies, including the Aussie.

Furthermore, the Reserve Bank of Australia's (RBA) hawkish stance should offer some support to the AUD/USD pair. In fact, the RBA November meeting minutes released on Tuesday indicated that the board remains vigilant to upside inflation risks and believes that policy needs to remain restrictive. This might hold back traders from placing aggressive bearish bets around the Australian Dollar (AUD) and act as a tailwind for the currency pair. 

Moving ahead, investors now look forward to speeches from a slew of influential FOMC members, due later during the North American session, for cues about the future rate-cut path. This, along with the US bond yields and the broader risk sentiment, will drive the USD and produce short-term trading opportunities around the AUD/USD pair. The focus will then shit on RBA  Governor Michele Bullock's speech during the early Asian hours on Thursday.

There has been a slight increase in momentum; the Australian Dollar (AUD) is expected to rise further to 0.6560. In the longer run, current price action is part of a rebound that could reach 0.6560, possibly 0.6600, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.

Current rebound can reach 0.6560

24-HOUR VIEW: “We expected AUD to trade in a range between 0.6470 and 0.6520 yesterday. Our view was incorrect as AUD rose to 0.6534. There has been a slight increase in momentum. Today, AUD is expected to rise further to 0.6560. The major resistance at 0.6600 is unlikely to come into view. To maintain the buildup in momentum, AUD must not break below 0.6500, with minor support at 0.6515.”

1-3 WEEKS VIEW: “Yesterday (19 Nov, spot at 0.6505), we noted that ‘downward momentum is slowing.’ We pointed out, ‘a break above 0.6520 would mean that instead of continuing to weaken, AUD is more likely to consolidate.’ AUD then broke above 0.6520, reaching a high of 0.6534. Not only has downward momentum faded, but upward momentum has also increased to an extent. We view the current price action as part of a rebound that could reach 0.6560, possibly 0.6600. We will maintain the same view as long as AUD remains above 0.6460.”

• AUD/USD finds resistance at the psychological level of 0.6500 amid ongoing bearish bias.
• The pair may test support around the psychological level of 0.6400, followed by the descending channel’s lower boundary.
• Further resistance appears around the nine-day EMA at 0.6518.

AUD/USD halts two days of gains, trading around 0.6500 during the European hours on Tuesday. Technical analysis of the daily chart shows the pair moving downwards within a descending channel pattern, reinforcing an ongoing bearish bias.

The 14-day Relative Strength Index (RSI) is positioned below the 50 level, confirming the prevailing bearish sentiment. Additionally, the nine-day EMA remains below the 14-day EMA, which suggests a bearish price momentum for a short-term period.

In terms of support, the AUD/USD pair may approach the psychological level of 0.6400, followed by the lower boundary of the descending channel at 0.6390 level. A decisive break below the descending channel could amplify selling pressure, potentially driving the pair toward its yearly low of 0.6348, last recorded on August 5.

On the upside, the 0.6500 level serves as immediate resistance. A sustained move above this threshold might push the AUD/USD pair toward the nine-day EMA at 0.6518, followed by the 14-day EMA at 0.6541 level. Surpassing these levels could pave the way for a rally toward the three-week high of 0.6687.

AUD/USD: Daily Chart

The Australian Dollar (AUD) is expected to trade in a range between 0.6470 and 0.6520. In the longer run, downward momentum is slowing; a break of 0.6520 would mean that AUD is not weakening further, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.

AUD is expected to trade between 0.6470 and 0.6520

24-HOUR VIEW: “Yesterday, we noted that ‘As momentum indicators are turning flat, further sideways trading appears likely, probably in a range of 0.6445/0.6485.’ The subsequent advance that sent AUD to a high of 0.6510 was unexpected. The advance did not result in any significant increase in momentum, and AUD is unlikely to rise much further. Today, AUD is expected to trade in a range between 0.6470 and 0.6520.”

1-3 WEEKS VIEW: “We revised our view to negative in the middle of last week. In our latest narrative from last Friday (15 Nov, spot at 0.6450), we highlighted that ‘further AUD weakness still appears likely.’ We also highlighted that ‘The next level to watch is 0.6400.’ Yesterday, AUD rebounded to a high of 0.6510, not far below our ‘strong resistance’ level of 0.6520. Downward momentum is slowing, a break above 0.6520 would mean that instead of continuing to weaken, AUD is more likely to consolidate.”

• AUD/USD holds steady around 0.6505 in Monday’s early Asian session. 
• The stronger US economic data and cautious comments from Fed officials might lift the USD. 
• Trump's policies on taxes, tariffs could weigh on the Aussie.

The AUD/USD pair trades flat near 0.6505 amid the consolidation of the US Dollar (USD) during the early Asian session on Tuesday. Investors will monitor the Reserve Bank of Australia (RBA) Meeting Minutes, which is due later on Tuesday. 

The US Dollar Index (DXY), which measures the USD against a basket of currencies, currently trades around 106.20 after retreating from a more than one-year high last week of 107.07. The Greenback struggles to gain ground as the Trump trade seems to lose momentum. However, the stronger US economic data and cautious remarks from the Federal Reserve (Fed) might cap the downside for the USD in the near term. 

In a light week for US economic data, the National Association of Home Builders (NAHB) Housing Market Index climbed to 46.0 in November, the highest since April, from 43.0 in October, beating the estimation of 44.0.

On the Aussie front, Donald Trump has threatened to implement 60% tariffs on exports from China as he seeks to protect US companies and jobs. The likely negative spillovers from Trump’s policies might drag the Australian Dollar (AUD) lower as China is a major trading partner of Australia. 

Investors brace for the RBA Meeting Minutes for more cues on future interest rates. The hawkish tone about the inflationary outlook for the Australian economy could lift the Aussie against the USD for the time being. 

• AUD/USD struggles around 0.6450 as the US Dollar performs strong broadly.
• Trump’s economic agenda is expected to boost price pressures.
• Investors await the RBA minutes for fresh interest rate guidance.

The AUD/USD pair trades with caution near 0.6450 in Monday’s European session. The Aussie pair finds temporary support but struggles to gain ground as the US Dollar (USD) remains broadly firm. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, edges lower to near 106.50 in European trading hours but remains close to its annual high of 107.00.

The optimism over President-elected Donald Trump implementing its economic agenda in his administration has kept the US Dollar on the frontfoot. Donald Trump is expected to levy hefty tariffs on imports and lower taxes, which will accelerate inflationary pressures and force the Federal Reserve (Fed) to follow a more gradual policy-easing approach.

Also, Fed Chair Jerome Powell said on Thursday that the economy has not sent any signals, which strain on cutting interest rates aggressively. However, he commented that price pressures remain on a sustainable path towards the bank’s target of 2%, which allows us to continue heading towards the neutral rate.

For the last policy meeting of this year, traders see a 65% chance that the Fed will cut interest rates by 25 basis points (bps) to 4.25%-4.50%, according to the CME FedWatch tool.

Meanwhile, the next move in the Australian Dollar (AUD) will likely occur on Tuesday after the release of the Reserve Bank of Australia (RBA) minutes of the monetary policy that took place on November 5. In the policy meeting, the RBA left its Official Cash Rate (OCR) unchanged at 4.35% and Governor Michelle Bullock delivered a hawkish interest rate guidance with concerns over upside risks to inflationary pressures.

Momentum indicators are turning flat; Australian Dollar (AUD) is likely to trade in a sideways range of 0.6445/0.6485. In the longer run, further AUD weakness still appears likely; the next level to watch is 0.6400, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.

The next level to watch is 0.6400

24-HOUR VIEW: “When AUD was at 0.6450 last Friday, we highlighted that ‘provided that 0.6490 remains intact, AUD could decline further.’ However, we pointed out that ‘the major support at 0.6400 is unlikely to come into view.’ Our expectations did not turn out, as AUD traded sideways between 0.6443 and 0.6482, closing at 0.6465 (+0.16%). As momentum indicators are turning flat, further sideways trading appears likely, probably in a range of 0.6445/0.6485.”

1-3 WEEKS VIEW: “We indicated last Friday (15 Nov, spot at 0.6450) that ‘further AUD weakness still appears likely.’ We also highlighted that ‘The next level to watch is 0.6400.’ Although downward momentum has slowed somewhat, we will continue to hold the same view for now. Overall, only a breach of 0.6520 (no change in ‘strong resistance’ level) would mean that the weakness in AUD has stabilised.”