Australian dollar extends recovery as US dollar eases, consumer confidence data in focus

Daily Currency Update

The Australian dollar (AUD) continued to gain ground against the US dollar (USD) in Monday trading, extending its recent recovery as the greenback lost early-session momentum. The currency pair is rebounding toward the upper end of its recent consolidation range, supported by a broader pullback in the USD and improved risk sentiment in global markets.

At the time of writing, AUD/USD is hovering around US$0.6612, approaching the top of the US$0.6580–US$0.6620 range that has contained price movements since late last week. Earlier in the session, the pair experienced sharp swings in both directions, reflecting market uncertainty ahead of key economic data releases.

The Australian dollar’s resilience appears partly driven by fading US dollar strength, as investors reassess the trajectory of US interest rates following mixed economic signals. Softer Treasury yields and a cautious tone from Federal Reserve officials have contributed to a more subdued USD backdrop, allowing risk-sensitive currencies like the AUD to regain some lost ground.

Market participants are now turning their attention to domestic data, with Australia’s Westpac Consumer Confidence Index for October due today. The release will offer a timely snapshot of household sentiment amid ongoing cost-of-living pressures and uncertainty surrounding monetary policy. A stronger-than-expected reading could further support the Aussie by reinforcing expectations of steady consumer demand despite broader economic headwinds.

In the short term, the AUD/USD pair remains technically constrained within its recent range, with a sustained break above US$0.6620 likely needed to signal a more decisive bullish shift. Conversely, a drop below US$0.6580 could expose the pair to renewed downside pressure. Until then, traders will likely remain focused on incoming data and broader macroeconomic cues for direction.