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AUD/USD rises toward 0.6600 during the ongoing Trump-Xi meeting

October 29, 2025

The AUD/USD saw an uptick after regaining some ground lost in prior sessions, trading near 0.6590 in Asian markets on Thursday. The Australian dollar remains stable against the US dollar, particularly after the anticipated meeting between US President Trump and Chinese President Xi Jinping in South Korea. Considering the tight trading ties between Australia and China, any shifts in China’s economic landscape could influence the Australian dollar.

Trump indicated he would lower tariffs on China from 57% to 47%. He also stated that the rare earth issue has been resolved, lifting prior restrictions on China’s rare earth exports. Additionally, soybean purchases are set to commence right away, and China has committed to enhancing measures against the fentanyl crisis, though Trump made it clear that not all discussions were covered.

The Australian dollar found support on Wednesday, buoyed by inflation data for the third quarter and CPI figures for August that beat forecasts. This positive data has likely dampened speculation regarding immediate interest rate cuts by the Reserve Bank of Australia (RBA). Governor Bullock mentioned that, despite the unexpected rise in unemployment, the labor market still shows signs of being somewhat tight.

US Dollar Weakens Amid Fed Policy Uncertainty

The US Dollar Index (DXY), which tracks the dollar against six major currencies, has stalled around 98.90 after gaining in the previous session.
On Wednesday, the US Federal Reserve (Fed) opted for a widely anticipated 25 basis point interest rate cut. This marks the second consecutive year of reductions, but some policymakers suggest these measures may not suffice to stanch further declines, even as they anticipate inflationary pressures could rise later this year.
The dollar firmed post-Fed’s confirmation of its plans to taper quantitative easing (QE) by converting mortgage-backed assets into long-term government bonds by December 1.
In a post-meeting press conference, Chairman Jerome Powell noted little change in employment and inflation outlooks since September. He remarked that the ongoing government shutdown is a burden on economic activity but may reverse once resolved. He emphasized that further rate cuts in December aren’t guaranteed, and the future remains fraught with uncertainty.
The average CPI for Australia saw a quarterly increase of 1.0% and an annual rise of 3.0%. Market forecasts had suggested an increase of 0.8% quarter-over-quarter and 2.7% year-over-year for the September quarter. The monthly CPI rose by 3.5% year-over-year in August, surpassing earlier predictions of 3.1%.
The U.S. Bureau of Labor Statistics (BLS) reported that the US CPI rose 3.0% year-over-year in September, following a 2.9% rise in the previous month. This was below market expectations of 3.1%. The monthly CPI noted a 0.3% increase, up from August’s 0.4%, while core CPI saw a 0.2% monthly rise, falling short of the 0.3% forecast, with a 3.0% annual rise reported for September.

Australian Dollar Approaches 0.6600 Resistance with Potential Bullish Shift

The AUD/USD pair hovered around 0.6590 on Thursday. Technical analysis of the daily chart suggests a neutral outlook, as the pair trades within a rectangular pattern. Currently, it stands above the 9-day exponential moving average (EMA), indicating solid short-term price momentum.

On the upside, the immediate obstacle is at the psychological threshold of 0.6600, followed by a rectangular upper boundary around 0.6630. A breakout beyond this rectangle could establish a bullish trend, perhaps allowing the AUD/USD pair to explore the prior 12-month high of 0.6707 reached on September 17.

Support lies at the 9-day EMA at 0.6549, which aligns with the 50-day EMA at 0.6546. A drop below these levels might diminish both short-term and medium-term momentum, pushing the AUD/USD to test the lower boundary near 0.6450 and potentially revisit the four-month low at 0.6414.