- The AUD/USD is expected to remain steady at 0.6420 in early Asia, following a 0.49% drop on Tuesday due to a rate cut by the RBA to 3.85%.
- The RBA’s decision to lower rates by 25 basis points was based on a more balanced view of inflation risks and growing global uncertainty.
- The governor indicated flexibility, stating that the RBA is prepared for future actions if necessary, but won’t give specific guidance on the terminal rate.
The Australian Dollar (AUD) is set to start the Asian trading session nearly unchanged against the US Dollar (USD) on Wednesday after a previous decline of 0.49%, attributed to the Reserve Bank of Australia (RBA) cutting interest rates. As of now, AUD/USD is holding steady at 0.6420.
AUD/USD remains stable around 0.6420 following a 25 bps cut by the RBA.
During the North American trading session, AUD/USD managed to recover some lost ground after dropping to a daily low of 0.6391, prompted by the RBA’s decision to reduce rates by 25 basis points from 4.10% down to 3.85%. The RBA considered a larger cut of 50 basis points but ultimately decided on the 25 basis point reduction, citing a more balanced outlook on inflation amidst rising global economic uncertainty.
The RBA has projected an average inflation rate of 2.6% by June 2025, along with expectations for the Australian economy to grow by 1.8% in June 2025 and 2.2% in 2026.
Governor Michele Brock mentioned that the RBA stands ready to implement additional rate cuts when necessary, highlighting that inflation is cooling. However, she did not clarify where the rates might ultimately settle.
Information from Prime Market Terminal suggests that traders are anticipating further easing of over 75 bps by year-end.
On Tuesday during the US session, traders were particularly focused on President Donald Trump’s proposed new bill, amid a lack of significant trade agreements and a sparse economic calendar.
Meanwhile, some Federal Reserve officials have made notable remarks. St. Louis Fed’s Albert Musalem pointed out that monetary policy appears well-placed, advocating for a relentless pursuit of inflation control if inflation expectations recede. Cleveland Fed’s Hammack mentioned she is considering a cautious approach, while Atlanta’s Fed Bostic expressed a need for more clarity in the economic outlook before making decisions about policy adjustments.
Looking ahead, Australia’s economic schedule includes the release of a combined reading index and the RBA’s chart pack.
AUD/USD Price Chart – Daily
Australian dollar prices this week
The following table outlines how the Australian Dollar (AUD) is performing against major currencies this week, with AUD showing strength against the US dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.86% | -0.80% | -0.61% | -0.45% | -0.26% | -0.72% | -1.10% | |
| EUR | 0.86% | 0.04% | 0.31% | 0.47% | 0.73% | 0.20% | -0.24% | |
| GBP | 0.80% | -0.04% | -0.04% | 0.43% | 0.69% | 0.16% | -0.28% | |
| JPY | 0.61% | -0.31% | 0.04% | 0.17% | 0.53% | 0.10% | -0.43% | |
| CAD | 0.45% | -0.47% | -0.43% | -0.17% | 0.20% | -0.28% | -0.70% | |
| AUD | 0.26% | -0.73% | -0.69% | -0.53% | -0.20% | -0.52% | -0.94% | |
| NZD | 0.72% | -0.20% | -0.16% | -0.10% | 0.28% | 0.52% | -0.44% | |
| CHF | 1.10% | 0.24% | 0.28% | 0.43% | 0.70% | 0.94% | 0.44% |
The table illustrates the percentage change in the Australian Dollar against other major currencies. The base currency is shown in the left column and the estimated currency across the top. For example, the change in the AUD relative to the USD is indicated in the box at their intersection.
