- Australian inflation expectations increase, which increases the possibility of RBA to additional price cuts.
- Ease of inflation trends in the United States, which raised the expectations of reducing the federal reserve rate in September.
- AUD/USD rises with expectations of narrowing of monetary policy divergences.
The AUD/USD is traded with a little less than the main resistance as the different economic signals between Australia and the United States Drive renewed the bullish momentum in the pair, which is currently being traded at 0.6529, an increase of 0.44 % on Thursday.
Traders closely monitor the publication on Friday from the Michigan University Moral Report and the accompanying inflation forecast data.
The first consumer morale is expected to be 53.5, up from 52.2 in May. Meanwhile, inflation expectations were previously reported over two years, 5 years, 6.6 % and 4.2 %, respectively.
Any negative surprise in consumer morale or signs that inflation expectations are still high that can increase US dollar fluctuations and significantly affect the direction near the AUD/USD exchange rate.
Inflation trends and interest rate expectations raise AUD/USD
Consumer enlargement expectations in Australia rose on Thursday, to 5 % in June, an increase of 4.1 % in May. This increase has sparked speculation that the Australian Reserve Bank (RBA) can stop any Duvish axis and maintain the position of policy falcons in response to continuous inflation concerns.
On the other hand, modern data from the United States highlighted the mitigation inflation trends and the stable labor market.
These developments have strengthened forecasts for federal reserve price discounts, with market pricing now in September.
AUD/USD trading below the resistance
AUD/USD is trading slightly lower than the main resistance at 0.6537, which represents the upper limits of the rising wedge pattern on May 26. Then it is 0.6545, and is currently the general high, which was reached on Wednesday.
The breakdown above 0.6545 can open the door for more bullish trend towards the psychological level 0.6600, with 78.6 % decreased from October to April at 0.6722 as a more extension goal.
On the downside, immediate support is on a simple 20 -day moving average (SMA), near 0.6468, followed by SMA for 200 days at 0.6428, which coincides with a 50 % Fibonacci alternative and represents a major level to monitor a possible transformation in momentum. The RSI indicator (RSI) in 59 indicates that the bullish momentum is based, but it has not yet extended.
Aud/USD Daily Chart
Economic indicator
Consumer feelings index in Michigan
Michigan’s consumer morale index, which was released on a monthly basis before Michigan UniversityIt is the morale of scanning between consumers in the United States. Questions cover three broad areas: personal financial affairs, working conditions and purchase conditions. Data shows a picture about whether consumers are ready to spend money or not, and it is a major factor because consumer spending is a major engine for the American economy. The Michigan University’s survey has proven to be an accurate indication of the future cycle of the American economy. The poll publishes a preliminary reading in the middle of the month and final printing at the end of the month. In general, the high reading of the US dollar (USD), while low reading is declining.
Read more.
Next version:
Friday, June 13, 2025 14:00 (Introduction)
repetition:
monthly
consensus:
53.5
former:
52.2
source:
Michigan University
Questions and answers in Australian dollars
One of the most important factors for the Australian dollar (AUD) is the level of interest rates set by the Australian Reserve Bank (RBA). Since Australia is a resource -rich country, the other main engine is the largest export price, iron ore. The health of the Chinese economy, the largest commercial partner, is a factor, as well as inflation in Australia, the rate of growth and commercial balance. Market morale-whether investors are eating more risky assets (risk) or searching for safe materials (risk)-is also a worker, with positive risks for AUD.
The Australian Reserve Bank (RBA) affects the Australian dollar (AUD) by determining the level of interest rates that Australian banks can persuade each other. This affects the level of interest rates in the economy as a whole. The main goal of RBA is to maintain a stable inflation rate of 2-3 % by setting interest rates up or down. Relatively high interest rates are supported compared to other main central banks, and relatively low vice versa. RBA can also use and tighten quantitative dilution to influence credit conditions, with previous AUD negative and positive to AUD.
China is the largest commercial partner in Australia, so the health of the Chinese economy is a major impact on the value of the Australian dollar (AUD). When the Chinese economy does a good job, it buys more raw materials, commodities and services from Australia, raising the demand for AUD, and raising its value. The opposite is the case when the Chinese economy does not grow at the speed available. Positive or negative surprises in Chinese growth data, therefore, they often have a direct impact on the Australian dollar and its wives.
Iron Ore is the largest export in Australia, as it represents 118 billion dollars annually according to data from 2021, with China as its main destination. Therefore, the price of iron ore can be an engine for the Australian dollar. In general, if the price of iron ore rises, the AUD also rises, as the total demand for the currency increases. The opposite is the case if the price of iron ore decreases. Iron ore prices also tend to increase the possibility of a positive commercial balance for Australia, which is also positive for AUD.
The commercial balance, which is the difference between what a country gains from its exports in exchange for what it pays to its imports is another factor that can affect the value of the Australian dollar. If Australia produces very required after exports, its currency will obtain a value of the excess demand created from foreign buyers who seek to buy its exports in exchange for what it spends to buy imports. Therefore, the positive net trade balance enhances AUD, with the opposite effect if the trade balance is negative.
