AUD/USD Forecast and News
AUD/USD drifts to 0.6550 as concerns about US tariffs resurface
The Australian Dollar is trading lower for the second day in a row, retreating from year-to-date highs, at 0.6590, with risk-sensitive assets weighed by growing tariff uncertainty as the July 9 deadline comes closer. News put investors on edge about a serious disruption of global trade and casts a shadow on net exporter countries, like Australia.
Latest Australian Dollar News
AUD/USD Technical Overview
From a technical perspective, the pair is consolidating gains after last week’s bullish move, but the double top at 0.6590, coupled with a lower high on Thursday and the 4-hour Relative Strength index crossing below the 50 level, suggests that bears are taking over
The pair should breach the 0.6535-06545 area (July 2,3 lows), to activate the DT pattern and confirm a deeper correction. The figure’s measured target is the confluence of the 38.2% Fibonacci retracement of the June 23-July 1 rally and June 27 low, at 0.6510.
On the upside, the pair should breach the mentioned July 1 and 2 high, at 0.6590, to resume the broader bullish trend and set its focus on the 127.2% and 161.8% Fibonacci extensions of the June 27 - July 1 upleg, at 0.6610 and 0.6640, respectively.
Fundamental Overview
The pair had turned lower somewhat earlier, as a stronger-than-expected US Nonfarm Payrolls report eased concerns about the country’s labour market and crushed hopes of imminent rate cuts by the US Federal Reserve.
Australian Dollar declines against US Dollar following labor market data
The US Dollar Index (DXY), which measures the value of the US Dollar against six major currencies, is trading lower at around 97.00 at the time of writing. Traders seek clarity on US President Donald Trump's plans for tariffs on various countries.
On Thursday, Trump told reporters that he “will begin sending letters on trade tariffs starting Friday.” He added that he would send letters to 10 countries at a time, laying out tariff rates of 20% to 30%, reported by Reuters.
President Trump's “one, big, beautiful” tax bill passed the House of Representatives and was sent to him for signing into law. The legislation includes significant tax cuts designed to stimulate economic growth. Trump hailed the bill's passage on Truth Social, calling it a “historic victory for American workers, families, and businesses.”
NFP indicated that the US labor force grew by 147,000 jobs, surpassing the anticipated 110,000 in June. Additionally, the Unemployment Rate declined to 4.1% from 4.2%. Meanwhile, weekly Jobless Claims fell to 233,000, down from 237,000, reflecting a resilient US labor market.
US ADP Employment Change fell for the first time in more than two years in June. The private-sector payrolls decreased by 33,000 in June after a downwardly revised 29,000 gain in May. This figure came in below the market consensus of 95,000.
US ISM Manufacturing PMI advanced to 49.0 from 48.5 in May, coming in above experts' expectations of 48.8. The readings indicated that economic activity in the United States (US) manufacturing sector improved in June. Meanwhile, US JOLTS Job Openings rose to 7.76 million in May, compared to 7.395 million reported in April. This figure came in above the market expectation of 7.3 million.
In Australia’s close trading partner, China, Caixin Services PMI declined to 50.6 in June from 51.1 in May, missing the market forecast of 51.0. China's Caixin Manufacturing Purchasing Managers' Index improved to 50.4 in June from 48.3 in May, according to the latest data released on Tuesday. The reading surpassed the market forecast of 49.0.
Australian Bureau of Statistics (ABS) reported that trade surplus narrowed to 2,238M month-over-month in May, against 5,091M expected and 4,859M (revised from 5,431M) in April. Meanwhile, Exports fell by 2.7% MoM from -1.7% (revised from -2.4%) prior. Imports increased by 3.8% MoM, against the previous increase of 1.6% (revised from 1.1%).
The S&P Global Australia Composite Purchasing Managers’ Index (PMI) climbed to 51.6 in June from the previous reading of 50.5. The reading has marked a ninth successive month of growth and the fastest pace since March. Meanwhile, Services PMI rose to 51.8 from 50.6 prior, indicating the fastest pace of expansion since May 2024.
The Australian Bureau of Statistics (ABS) showed that Retail Sales rose 0.2% month-over-month in May, compared to a flat 0% in April (revised from -0.1%). The reading came in below the market expectations of 0.4%. Meanwhile, Building Permits rose by 3.2% in May, as compared to the previous decline of 4.1%, but fell short of the expected 4.8% increase.
Australia’s S&P Global Manufacturing Purchasing Managers’ Index (PMI) fell to 50.6 in June from the previous 51.0. The output declined to its lowest reading since February due to adequate client inventories and weaker market conditions, data showed on Tuesday.
Latest AUD Analysis
Editors' picks
EUR/USD keeps the constructive stance, still below 1.1800
EUR/USD maintains a tight range around 1.1780 and continues to be on pace to finish the week with a decent increase. Due to the cautious market position, the pair's potential for extra gains appears limited as the deadline for US tariffs approaches. In the meanwhile, markets in the United States remain closed to observe the July 4th holiday.
GBP/USD treads water around 1.3650
The British Pound alternates gains with losses on Friday, prompting GBP/USD to gyrate around the mid-1.3600s amid thin trade conditions and scarce volatility following the inactivity in the US markets. Meanwhile, investors remain watchful regarding the recent tensions in the UK political landscape.
USD/JPY slumps to near 144.30 as Yen’s safe-haven demand increases
The USD/JPY pair falls over 0.4% to near 144.30 during European trading hours on Friday. The pair faces a sharp selling pressure as the safe-haven demand of the Japanese Yen has increased significantly, with investors turning cautious over the deadline of United States reciprocal tariffs on July 9.
Gold embarks on a consolidative phase around $3,300
Gold prices maintain a consolidative theme around the $3,300 mark per troy ounce, en route to clock decent weekly gains after two consecutive retracements. In the meantime, the precious metal is expected to remain under scrutiny on the back of trade concerns and the likelihood that the Fed might cut rates later in the year.
WTI wobbles around $66 as Trump’s tariff deadline looms large
West Texas Intermediate (WTI), futures on NYMEX, trades cautiously near $66.00 during the European trading session on Friday. The Oil price struggles to hold its recent recovery from the weekly low of $64.00 as investors turn cautious regarding the energy demand post the imposition of reciprocal tariffs by United States President Donald Trump, following the deadline on July 9.
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AUD/USD YEARLY FORECAST
What would happen to the AUD/USD this year? A brief update from our experts on where the AUD/USD can go in the upcoming months.
AUD/USD FORECAST 2025
The battle between the Australian Dollar (AUD) and the US Dollar (USD) will be one worth watching in 2025, with central banks stealing the limelight. The Reserve Bank of Australia (RBA) has kept interest rates at record highs whilst most of its overseas counterparts started the loosening process. The US Federal Reserve (Fed), on the other hand, has trimmed the benchmark interest rate by 100 bps through 2024 and aims to slow the pace of cuts in 2025. The central banks’ imbalance aims for record lows in AUD/USD.
MOST INFLUENTIAL POLITICAL EVENTS IN 2025 FOR AUD/USD
Beyond central banks, market players will be attentive to tariffs. The second coming of Donald Trump to the White House anticipates a global Trade War that could fuel inflationary pressures not only in the United States, but also in all major economies.
Given Trump’s personal battle with China, the Australian economy could end up benefiting from fresh commercial interactions with its neighbour giant.
About AUD/USD
AUD/USD
The AUD/USD currency pair, commonly known as the “Aussie”, represents how many US dollars (the quote currency) are needed to purchase one Australian dollar (the base currency). Alongside the New Zealand Dollar (NZD) and the Canadian Dollar (CAD), the AUD is considered a commodity currency due to Australia’s significant exports of raw materials such as precious metals, Oil, and agricultural products.
The Reserve Bank of Australia (RBA) has historically maintained higher interest rates compared to other industrialized nations. Combined with the relatively high liquidity of the AUD, this has made the AUD attractive for carry traders looking for higher yields.
Australia’s economy and currency are closely tied to China, its largest trading partner. Any changes in the Chinese economy can significantly impact the AUD. Additionally, the Australian Dollar is often seen as a diversification tool due to its exposure to Asian economies.
The pair AUD/USD also correlates with Gold prices. Gold is widely viewed as a safe haven asset against inflation and it is one of the most traded commodities.
INFLUENTIAL ORGANIZATIONS AND PEOPLE FOR THE AUD/USD
Reserve Bank of Australia (RBA)
The Reserve Bank of Australia (RBA) is Australia's central bank, deriving its functions and powers from the Reserve Bank Act 1959. Its primary duty is to contribute to currency stability, full employment and the economic prosperity and welfare of the Australian people. The RBA achieves this by setting the cash rate to meet a medium-term inflation target of between 2% and 3%, maintaining a strong financial system and efficient payment infrastructure and issuing the nation's banknotes.
Decisions are made by a board of governors at eight meetings a year and ad hoc emergency meetings as required.
The RBA provides banking services to the Australian Government, its agencies and several overseas central banks and official institutions. Additionally, it manages Australia's gold and foreign exchange reserves.
The official website , on X and YoutubeThe Federal Reserve (Fed)
The Federal Reserve (Fed) is the central bank of the United States (US) and it has two main targets: to maintain the unemployment rate at its lowest possible levels and to keep inflation around 2%. The Federal Reserve System's structure is composed of the presidentially appointed Board of Governors and the partially appointed Federal Open Market Committee (FOMC). The FOMC organizes eight scheduled meetings in a year to review economic and financial conditions. It also determines the appropriate stance of monetary policy and assesses the risks to its long-run goals of price stability and sustainable economic growth. The FOMC Minutes, which are released by the Board of Governors of the Federal Reserve weeks after the latest meeting, are a guide to the future US interest-rate policy.
Fed official website , on X and FacebookMichele Bullock
Michele Bullock is an Australian economist and the current Governor of the Reserve Bank of Australia. She assumed the role in September 2023 and is the first woman to hold the position. She is the Chair of the Reserve Bank Board, Payments System Board and Council of Financial Regulators. Prior to her current role, Bullock was the Deputy Governor of the RBA.
Bullock on her RBA profile and Wikipedia.
Jerome Powell
Jerome Powell took office as chairman of the Board of Governors of the Federal Reserve System in February 2018, for a four-year term ending in February 2022. He was sworn in on May 23, 2022, for a second term as Chairman ending May 15, 2026. Born in Washington D.C., he received a bachelor’s degree in politics from Princeton University in 1975 and earned a law degree from Georgetown University in 1979. Powell served as an assistant secretary and as undersecretary of the Treasury under President George H.W. Bush. He also worked as a lawyer and investment banker in New York City. From 1997 through 2005, Powell was a partner at The Carlyle Group.
Jerome Powell Fed's Profile and Wikipedia.
RBA NEWS & ANALYSIS
FED NEWS & ANALYSIS
ASSETS THAT INFLUENCE AUD/USD THE MOST
- Currencies: The Japanese Yen (JPY) and the Chinese Yuan (CNY), as Japan and China are the most significant trading partners of Australia. Other relevant currency pairs include EUR/USD , GBP/USD , USD/JPY , USD/CHF, NZD/USD and USD/CAD .
- Commodities: The most important is Gold, alongside Iron Ore and Natural Gas.
- Bonds: GACGB10 (Australia 10-year Government Bond Yield), and T-Note 10Y ( 10-year US Treasury note).