- The Australian Dollar is set to continue its winning streak for a fourth consecutive day on Thursday.
- The Reserve Bank of Australia is likely to lower rates by 25 basis points in July.
- While the US and Iran may have talks next week, President Trump is skeptical about the need for a diplomatic approach.
The Australian Dollar (AUD) rose against the US Dollar (USD) on Thursday, marking its fourth straight day of gains. The AUD/USD pair is experiencing strength, fueled by a more optimistic risk appetite, a situation likely influenced by the ceasefire between Israel and Iran, mediated by the somewhat fragile US. Market participants seem to be focusing on potential developments from the US-Iran discussions and other Middle Eastern conflicts.
President Trump has indicated that there may be a meeting between the US and Iran next week. However, reports suggest there are doubts regarding the necessity of a diplomatic solution to Iran’s nuclear ambitions, especially in light of the damage caused to key sites from US airstrikes.
According to data from the Australian Bureau of Statistics (ABS), there was a 2.9% increase in the three months leading up to May, which partially counters a previous 4.3% drop. Labor demand in Australia remains somewhat robust, with job vacancies particularly recovering in the construction and specialty sectors. Nevertheless, May’s job figures show 339,400 vacancies, representing a 2.8% decline from the previous year, which is the smallest annual drop seen in two years.
Weaker inflation data from Australia, combined with GDP figures that have come in lower than analysts expected, are likely to bolster anticipations of a 25 basis point rate cut from the Reserve Bank of Australia in July. There is also speculation about total interest rate cuts reaching 73 basis points by year-end.
The Australian Dollar benefits from the US Dollar’s challenges as Fed Chair Powell proceeds cautiously
- The US Dollar Index (DXY), which assesses the value of the dollar against six major currencies, is hovering around 97.60 at this moment. Traders are awaiting the annual GDP figures for the US, due to be released on Thursday.
- There’s talk that President Trump might announce a successor for Fed Chairman Jerome Powell by September or October. Former Fed governor Kevin Wahsh and Kevin Hassett, director of the National Economic Council, may be considered for the role.
- In his recent remarks, Fed Chair Powell stated that while Trump’s tariff policies could introduce a temporary price increase, they could also lead to persistent inflation. He emphasized the need for caution regarding further rate cuts.
- Powell’s testimony before the Congressional Budget Committee on Tuesday highlighted the case for delaying any interest rate reductions, possibly until the fourth quarter. He suggested that, if conditions are favorable, rate cuts could indeed continue.
- President Neil Kashkari reaffirmed the Fed’s cautious approach about inflation and the broader economic effects of tariff policies before making significant rate decisions.
- Kansas City Fed President Jeff Schmid noted early on Wednesday that central banks should wait to see how uncertainty tied to tariffs and policies affects the economy before making any adjustments to rates. He also pointed out that economic resilience provides a window to monitor price developments.
- US intelligence indicates that the strike on Iranian nuclear sites has only delayed Tehran’s program by a few months. Additionally, Iran’s Foreign Minister asserted that the nuclear initiative is still ongoing.
- The National Development and Reform Commission (NDRC) in China expressed confidence on Thursday in managing uncertainties stemming from external shocks, asserting that policy implementations will help mitigate negative impacts.
- Chinese Premier Li provided an optimistic perspective on the economy’s outlook this Thursday, highlighting strong resilience and growth potential. He mentioned that economic data suggests stability in the second quarter.
- Australia’s monthly consumer price index (CPI) reported a year-on-year increase of 2.1% in May. This inflation figure has been softer compared to market expectations of 2.3% or 2.4% and has eased after maintaining a steady pattern for three consecutive months.
- In June, the S&P Global Australia Manufacturing Purchasing Managers Index maintained a reading of 51.0. The services PMI improved to 51.3 from the earlier reading of 50.6, while the composite PMI rose from 50.5 to 51.2.
The Australian Dollar maintains support above 0.6500 for nine days
The AUD/USD trades around 0.6510 on Thursday. Daily technical analysis suggests a persistently bullish trend as the pair remains within a rising channel. The 14-day relative strength index (RSI) is above the 50 threshold, and the pair is performing better than the nine-day exponential moving average (EMA)—which indicates decent short-term price momentum.
On the flip side, the AUD/USD pair is targeting a seven-month high of 0.6552, reached on June 16, with an upward channel limit around 0.6570.
Immediate support can be found at the nine-day EMA, which stands at 0.6494. If this support is breached, it could weaken short-term momentum, pressuring the AUD/USD pair downward and determining whether it can hold the lower boundary of the upward channel around 0.6460, corresponding with a 50-day EMA of 0.6442.
AUD/USD: Daily Charts
Australian dollar prices today
The following table reflects the current rate of change for the Australian Dollar (AUD) against various major currencies, with the AUD showing strength against the US dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.10% | -0.32% | -0.48% | -0.06% | -0.24% | -0.13% | -0.10% | |
| EUR | 0.10% | -0.16% | -0.40% | 0.07% | -0.10% | -0.02% | 0.02% | |
| GBP | 0.32% | 0.16% | -0.24% | 0.22% | 0.06% | 0.16% | 0.18% | |
| JPY | 0.48% | 0.40% | 0.24% | 0.43% | 0.26% | 0.33% | 0.39% | |
| CAD | 0.06% | -0.07% | -0.22% | -0.43% | -0.16% | -0.16% | -0.04% | |
| AUD | 0.24% | 0.10% | -0.06% | -0.26% | 0.16% | 0.00% | 0.11% | |
| NZD | 0.13% | 0.02% | -0.16% | -0.33% | 0.16% | -0.00% | 0.12% | |
| CHF | 0.10% | -0.02% | -0.18% | -0.39% | 0.04% | -0.11% | -0.12% |
The above heatmap highlights the rate of change among major currencies. The selected base currency is positioned on the left, while the estimated currency appears at the top. For example, if one chooses Australian dollars from the left column and follows to the US dollars horizontally, the box’s rate reflects the AUD (base)/USD (quote).
