The Australian Dollar (AUD) remains subdued for the second consecutive day on Wednesday. The AUD/USD pair depreciates as the US Dollar (USD) stays firm, supported by stable US yields ahead of the Federal Reserve’s (Fed) interest rate decision later in the day. No rate changes are expected amid persistent inflation concerns and heightened economic uncertainty.
Australia's Westpac Leading Economic Index increased by 0.1% month-over-month in February 2025, maintaining the same pace as the previous month. Meanwhile, the six-month annualized growth rate in the index, which forecasts economic activity relative to the trend over the next three to nine months, rose to 0.8% from 0.6% in January.
Treasurer Jim Chalmers addressed trade tensions in a speech on Tuesday, rejecting a "race to the bottom" on tariffs. Chalmers criticized the Trump administration’s trade policies as "self-defeating and self-sabotaging," emphasizing Australia’s need to focus on economic resilience rather than retaliation. He also condemned the US decision to exclude Australia from steel and aluminum tariff exemptions, calling it "disappointing, unnecessary, senseless, and wrong," as per "The Guardian".
On Monday, Reserve Bank of Australia (RBA) Assistant Governor (Economic) Sarah Hunter reiterated the central bank’s cautious stance on rate cuts. The RBA’s February statement signaled a more conservative approach than market expectations, with a strong focus on monitoring US policy decisions and their potential impact on Australia’s inflation outlook.
The AUD/USD pair is trading around 0.6360 on Wednesday, maintaining its bullish trajectory as it continues to climb within the ascending channel on the daily chart. The 14-day Relative Strength Index (RSI) remains above 50, reinforcing the positive momentum.
On the upside, the AUD/USD pair may attempt to retest its three-month high of 0.6408, last reached on February 21. A breakout above this level could strengthen the bullish bias, potentially driving the pair toward the upper boundary of the ascending channel near 0.6490.
Key support lies at the nine-day Exponential Moving Average (EMA) of 0.6334, aligned with the lower boundary of the ascending channel. Further support is seen at the 50-day EMA at 0.6312. A decisive break below this critical zone could weaken the bullish outlook, exposing the AUD/USD pair to further downside pressure toward the six-week low of 0.6187, recorded on March 5.
The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the weakest against the US Dollar.
USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
---|---|---|---|---|---|---|---|---|
USD | 0.24% | 0.20% | 0.16% | 0.13% | 0.23% | 0.24% | 0.00% | |
EUR | -0.24% | -0.05% | -0.08% | -0.12% | -0.00% | 0.00% | -0.24% | |
GBP | -0.20% | 0.05% | -0.02% | -0.07% | 0.05% | 0.05% | -0.21% | |
JPY | -0.16% | 0.08% | 0.02% | -0.06% | 0.06% | 0.04% | -0.18% | |
CAD | -0.13% | 0.12% | 0.07% | 0.06% | 0.12% | 0.14% | -0.14% | |
AUD | -0.23% | 0.00% | -0.05% | -0.06% | -0.12% | -0.00% | -0.20% | |
NZD | -0.24% | -0.00% | -0.05% | -0.04% | -0.14% | 0.00% | -0.25% | |
CHF | -0.00% | 0.24% | 0.21% | 0.18% | 0.14% | 0.20% | 0.25% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).
The Federal Reserve (Fed) deliberates on monetary policy and makes a decision on interest rates at eight pre-scheduled meetings per year. It has two mandates: to keep inflation at 2%, and to maintain full employment. Its main tool for achieving this is by setting interest rates – both at which it lends to banks and banks lend to each other. If it decides to hike rates, the US Dollar (USD) tends to strengthen as it attracts more foreign capital inflows. If it cuts rates, it tends to weaken the USD as capital drains out to countries offering higher returns. If rates are left unchanged, attention turns to the tone of the Federal Open Market Committee (FOMC) statement, and whether it is hawkish (expectant of higher future interest rates), or dovish (expectant of lower future rates).
Read more.Next release: Wed Mar 19, 2025 18:00
Frequency: Irregular
Consensus: 4.5%
Previous: 4.5%
Source: Federal Reserve
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