Australian Dollar Insights Amid Economic Shifts
- The Australian Dollar is seeing some support as the chances of cuts to the RBA rates seem to be easing.
- China’s Consumer Price Index (CPI) showed a decrease of 0.4% year-on-year, with inflation dropping to 0% in August.
- Revisions to U.S. non-farm salary figures indicate that total agricultural employment might rise by 911,000 in March 2025.
The Australian Dollar (AUD) is expected to bounce back from its earlier losses on Wednesday. That said, the AUD/USD pair has faced challenges, with the U.S. dollar (USD) remaining stable even after the recent revisions to U.S. non-farm salary data.
Following the release of China’s CPI—down 0.4% year-on-year in August, after hitting 0% in July—the AUD/USD pair continued to struggle. The anticipated drop was only 0.2%. Monthly CPI inflation in China also reported 0%, aligning with the previous figure of 0.4%, slightly better than the expected 0.1%. This economic fluctuation in China might have repercussions for the AUD, considering their close trading relationship.
The AUD could maintain some stability due to a strong trade surplus in July, along with second-quarter GDP results and high inflation in July that have lessened expectations for the Reserve Bank of Australia’s (RBA) potential rate cuts. Currently, there’s an 84% chance the RBA will keep rates steady in September, while the likelihood of a 25 basis point reduction in November has decreased from 100% to 80%.
Nonetheless, Matthew Hassan, Australia’s head of macro forecasting, observed that consumer recovery has been slowing since mid-2024, especially after Westpac’s consumer confidence dropped from 98.5 to 95.4 in August. He suggested that additional policy easing might be necessary and predicted a 25 basis point reduction in November, as well as two more cuts in 2026.
Next up, all eyes will be on U.S. inflation reports, as they could provide insight into the Federal Reserve’s policy direction. The U.S. Producer Price Index (PPI) for August is set for release on Wednesday, followed by the Consumer Price Index (CPI) on Thursday.
Pressure on the Australian Dollar as U.S. Dollar Gains Strength
- The U.S. Dollar Index (DXY), which evaluates the U.S. dollar against six major currencies, is hovering around 97.70 currently. Traders are anticipating significant rate cuts in September, as the CME FedWatch tool indicates prices above 93% for a 25 basis point cut from the Fed.
- The U.S. Bureau of Labor Statistics (BLS) released preliminary estimates showing a decline in total agricultural employment, suggesting a less robust labor market than previously thought, with a shortfall of about 76,000 jobs each month. The final benchmark revision is expected in February 2026.
- In a recent Bloomberg TV interview, Bank of Chicago President Austan Goolsbee expressed uncertainty about the timing of possible interest rate cuts in September. He noted ongoing concerns regarding high inflation data.
- According to the BLS, U.S. non-farm pay salaries rose by 22,000 in August, falling short of the anticipated 75,000 increase and following a revised gain of 79,000 in July. The unemployment rate edged up to 4.3% from 4.2%, while average hourly earnings rose by 0.3% in July.
- China’s trade balance improved to 73.29 billion CNY in August, an increase from 70.518 billion CNY, with exports rising by 4.8% in August versus an 8% jump in July.
- Australia also saw its trade surplus climb to 700 million CNY in July, up from 5,366 million CNY the previous month, despite expectations for a decline. The GDP grew by 0.6% in the quarter, exceeding the anticipated 0.5% increase, with a year-on-year growth of 1.8% compared to 1.4% in the prior quarter.
- Australia’s monthly CPI surged by 2.8% year-on-year in July, surpassing both the previous increase of 1.9% and the forecast of 2.3%.
AUD Trading Dynamics Close to Key Resistance Levels
The AUD/USD pair was trading around 0.6580 on Wednesday. Technical analysis indicates that the pair remains within a rising channel pattern, signaling a bullish outlook. The pair is also above the nine-day exponential moving average (EMA), suggesting strong short-term price momentum.
Initial resistance is at the 0.6625 mark, recorded on July 24, with a further cap around 0.6640. A breakthrough above this resistance zone could reinforce bullish sentiments, supporting the AUD/USD pair’s position recorded in November 2024.
On the downside, the AUD/USD pair is looking towards a nine-day EMA of 0.6556, which aligns with the channel’s lower boundary at 0.6550. A breakout below this channel could weaken bullish trends and cause the pair to test the 50-day EMA at 0.6512. A more significant dip might place pressure on the pair, driving it to the 0.6414 mark, which was noted in August.
AUD/USD: Daily Charts
Australian Dollar Prices Today
The table below provides the current exchange rates for the Australian Dollar (AUD) against major currencies, highlighting its relative strength, particularly against the Canadian dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.01% | -0.05% | 0.01% | 0.07% | -0.10% | -0.15% | -0.05% | |
| EUR | -0.01% | -0.06% | -0.07% | 0.05% | -0.16% | -0.17% | -0.06% | |
| GBP | 0.05% | 0.06% | 0.04% | 0.13% | -0.08% | -0.09% | 0.04% | |
| JPY | -0.01% | 0.07% | -0.04% | 0.13% | -0.18% | -0.18% | 0.22% | |
| CAD | -0.07% | -0.05% | -0.13% | -0.13% | -0.22% | -0.25% | -0.09% | |
| AUD | 0.10% | 0.16% | 0.08% | 0.18% | 0.22% | -0.01% | 0.12% | |
| NZD | 0.15% | 0.17% | 0.09% | 0.18% | 0.25% | 0.01% | 0.29% | |
| CHF | 0.05% | 0.06% | -0.04% | -0.22% | 0.09% | -0.12% | -0.29% |
This summary indicates how the Australian dollar is faring against various major currencies today, with notable strength against the Canadian dollar.
