Australian Dollar Edges Higher Amid Global Market Volatility and Stronger Commodity Prices
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Daily Currency Update
The AUD/USD pair gained approximately +0.17 % over the week, making the Australian dollar one of the modest winners among G10 currencies. The rise was supported by growing risk appetite as markets priced in improving trade sentiment and awaited key data and central bank updates. Notably, AUD/USD climbed to around 0.6619–0.6625, reaching eight‑month highs before pulling back slightly by the end of the week. However, mixed economic signals weighed on the currency toward the close. A weak labour market report—showing unemployment rising to 4.3 % and full‑time jobs declining—revived bets on Reserve Bank of Australia rate cuts, pressuring the AUD. This week, the Australian dollar (AUD) faces several key events that could influence its direction. Market focus will be on central bank meetings, particularly the U.S. Federal Reserve and the Bank of Japan, both of which are expected to hold rates steady. However, their statements may offer clues about future rate paths, potentially affecting global currency flows and risk sentiment. Optimism around global trade negotiations—particularly upcoming U.S.–China talks—could also support the risk-sensitive Aussie. On the domestic front, traders will closely watch the Reserve Bank of Australia's meeting minutes, as well as fresh labour and inflation data, for signals about potential rate cuts or a shift in policy tone. Technically, the AUD/USD pair faces resistance around 0.6590 to 0.6687, with support near 0.6450 and the 200-day moving average at 0.6398. Forecasts suggest a cautiously optimistic outlook, with some analysts predicting the AUD could test 0.660 if sentiment holds. However, weak domestic data or hawkish rhetoric from the Fed or BOJ may cap gains or even trigger a pullback.Key Movers
Last week, the U.S. Dollar Index (DXY)—which tracks the dollar versus six major currencies—rose by approximately 0.72%, climbing from around 97.85 to around 98.57 by mid‑week before settling near 97.67 on Friday, reflecting a steady and cautious rebound in the greenback. The gain was driven by surprisingly strong U.S. data—namely retail sales outperforming expectations and unemployment claims falling to a three-month low—reducing market expectations for immediate Federal Reserve rate cuts and supporting USD demand. Meanwhile, optimism around U.S. trade negotiations—especially progress with the EU and Japan—helped boost risk appetite globally, which in turn weighed on the dollar compared with risk-sensitive currencies such as the euro, yen, and antipodeans. Overall, the dollar posted a modest weekly gain, reversing earlier weakness and positioning itself as a beneficiary of resilient U.S. fundamentals and cautious Fed expectations. Looking ahead this week and much hinges on this week’s pivotal Federal Reserve policy meeting, where rates are expected to be left unchanged. But all eyes are on Chair Jerome Powell’s comments, particularly any signals of timeline shift for future rate cuts. Renewed political pressure—especially from the White House calling for “dramatically lower” rates—adds to uncertainty about the Fed’s independence and could weigh on dollar sentiment. Beyond central bank developments, markets are assessing tariff risks, evolving U.S.–Japan trade negotiations, and ongoing fiscal concerns—including widening U.S. deficits and rising debt levels, which may further undermine investor confidence in the dollar.Expected Ranges
- AUD/USD: 0.6500 - 0.6700 ▼
- AUD/EUR: 0.5450 - 0.5650 ▼
- GBP/AUD: 2.0300 - 2.0500 ▲
- AUD/NZD: 1.0800 - 1.1000 ▲
- AUD/CAD: 0.8900 - 0.9000 ▼