Australian Dollar Holds Gains but Faces Resistance Ahead of RBA Decision
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Daily Currency Update
Last week the Australian dollar (AUD) gained ground against the U.S. dollar, appreciating by approximately 0.7%. The AUD/USD pair opened the week around 0.6550, climbed to a high near 0.6597 on July 10, and closed slightly lower at around 0.6572 by Friday. The Aussie was supported mid-week by stronger-than-expected Australian inflation data and encouraging economic signals from China, which boosted risk sentiment and lifted demand for the currency. However, the rally lost momentum toward the end of the week as the U.S. dollar regained strength following renewed trade tariff concerns and a more cautious global outlook. Despite the brief pullback, the AUD managed to hold most of its gains for the week, trading in a relatively tight range between 0.6491 and 0.6597. Looking ahead this week and the AUD/USD is expected to trade in a relatively narrow range, with slight bearish pressure as markets brace for an RBA rate cut and its ripples through global sentiment. Technical indicators show resistance around 0.6600.Key Movers
Last week the U.S. dollar Index (DXY) posted a modest rebound, climbing from the sub‑97.0 area to close around 97.87 on July 11, marking approximately a +0.6% weekly gain. The dollar’s strength was driven by heightened risk aversion amid escalating trade‑tariff tensions and unexpected resilience in the U.S. labor market, with initial jobless claims falling below expectations . Despite still trading below longer-term highs, the index regained momentum in the latter part of the week, supported by diminishing odds of Fed rate cuts and firm economic data perception . Overall, the dollar ended the week solidly higher, posting its best performance since late February.U.S. stock markets ended slightly lower, reversing recent gains amid renewed global trade tensions. The Dow Jones Industrial Average led the declines with a drop of about 1%, snapping a three-week winning streak following President Trump’s announcement of new tariffs on imports from Canada, the EU, and Mexico. The S&P 500 slipped around 0.4% after touching record highs earlier in the week, while the tech-heavy Nasdaq fell approximately 0.2% as investor caution mounted despite continued strength in large-cap technology names. Small-cap stocks underperformed, with the Russell 2000 tumbling about 1.3% on Friday alone. Although corporate earnings remained largely upbeat, the market’s mood turned risk-averse due to trade policy uncertainty and speculation over future Fed policy, leading to a broadly cautious close for U.S. equities.
Expected Ranges
- AUD/USD: 0.6450 - 0.6650 ▲
- AUD/EUR: 0.5550 - 0.5750 ▲
- GBP/AUD: 2.0400 - 2.0600 ▼
- AUD/NZD: 1.0850 - 1.1050 ▲
- AUD/CAD: 0.8900 - 0.9100 ▲