The Australian dollar tests the 0.66 mark! With the US dollar dragged down by the shutdown, where is the next target for Australian dollar bulls?
2025-10-09 11:58:38
The Australian dollar extended its gains against the U.S. dollar on Thursday (October 9), strengthening for the second consecutive trading day. The pair climbed further after the U.S. dollar came under downward pressure and the U.S. dollar index turned negative.
The Reserve Bank of Australia is expected to remain on hold after keeping its official cash rate at 3.6% in September, warning that inflation is persistent, particularly in the services sector, while the labor market remains tight.
China's Ministry of Commerce announced Thursday that it will tighten rare earth export controls, effective December 1st. Foreign companies and individuals exporting rare earths will be required to apply for dual-use export licenses. It's worth noting that China and Australia are important trading partners, and China's economic policies may have a significant impact on Australia.
The US dollar index (DXY) halted its three-day winning streak and is now trading around 98.70. Market focus is on a speech by Federal Reserve Chairman Jerome Powell later Thursday.
The US government shutdown has entered its ninth day, with no sign of easing. The Senate rejected a proposal to end the shutdown for the sixth time on Thursday. Minutes from the Federal Reserve's September meeting, released on Wednesday, showed that most policymakers supported a September interest rate cut and hinted at further easing this year. However, some members advocated for a more cautious approach due to concerns about inflation.
Federal Reserve Board Governor Stephen Milan put forward a unique view on Tuesday, arguing that inflation is essentially caused by "population growth" and emphasizing that monetary policy needs to be adjusted ahead of the downward trend of the neutral interest rate.
Minneapolis Fed President Neel Kashkari was more reserved, warning that it was too early to judge whether tariff-induced inflation would be "sticky." However, he was particularly optimistic about the performance of the labor market and expected that the recent weak job creation would regain momentum.
Kansas City Fed President Jeffrey Schmid made hawkish remarks on Monday, emphasizing that the Fed must maintain its credibility in fighting inflation, pointing out that current inflation levels are too high, while believing that monetary policy adjustments are just right.
According to the CME Fed Watch tool, the market is currently betting on a 92.5% probability of a rate cut in October and a 78% probability of another rate cut in December.
Australia's private sector residential approvals fell 2.6% month-on-month to 9,027 units in August, in line with expectations and reversing a 1.3% increase in the previous month; seasonally adjusted building permits fell 6% month-on-month to 14,744 units, marking the second consecutive month of decline after a 10% drop in the previous month.
Data from the University of Melbourne on Tuesday showed that Australia's West Pacific Consumer Confidence Index fell sharply by 3.5% month-on-month to 92.1 in October, with the decline further widening from the previous value of 3.1%, marking the fastest decline since April this year; ANZ job advertisements in September fell sharply by 3.3% month-on-month, far exceeding the previous value of 0.3% decline.
The TD Securities-Melbourne Institute inflation gauge rose 0.4% month-on-month in September, reversing a 0.3% drop in the previous month; the annual rate climbed from 2.8% to 3%.
The Australian dollar is trading around 0.6600 against the US dollar. Technical analysis on the daily chart shows that the pair remains within an ascending channel, suggesting a continuation of the bullish trend. Furthermore, the 14-day relative strength index (RSI) remains firmly above 50, further reinforcing bullish momentum.
On the upside, the Australian dollar may test the 12-month high of 0.6707 against the US dollar set on September 17. If it can effectively break through this level, the exchange rate is expected to challenge the upper track of the ascending channel at 0.6800.
On the downside, the recent support lies at the key support zone formed by the 50-day exponential moving average at 0.6552 and the lower limit of the ascending channel at 0.6560. If this important support zone is broken, market sentiment may turn bearish and the exchange rate may fall to the four-month low of around 0.6414 set on August 21.
(AUD/USD daily chart, source: Yihuitong)
At 11:57 Beijing time, the Australian dollar was trading at 0.6601/02 against the US dollar.
The Reserve Bank of Australia is expected to remain on hold after keeping its official cash rate at 3.6% in September, warning that inflation is persistent, particularly in the services sector, while the labor market remains tight.
China's Ministry of Commerce announced Thursday that it will tighten rare earth export controls, effective December 1st. Foreign companies and individuals exporting rare earths will be required to apply for dual-use export licenses. It's worth noting that China and Australia are important trading partners, and China's economic policies may have a significant impact on Australia.
Australian dollar strengthens as US dollar weighs on government shutdown
The US dollar index (DXY) halted its three-day winning streak and is now trading around 98.70. Market focus is on a speech by Federal Reserve Chairman Jerome Powell later Thursday.
The US government shutdown has entered its ninth day, with no sign of easing. The Senate rejected a proposal to end the shutdown for the sixth time on Thursday. Minutes from the Federal Reserve's September meeting, released on Wednesday, showed that most policymakers supported a September interest rate cut and hinted at further easing this year. However, some members advocated for a more cautious approach due to concerns about inflation.
Federal Reserve Board Governor Stephen Milan put forward a unique view on Tuesday, arguing that inflation is essentially caused by "population growth" and emphasizing that monetary policy needs to be adjusted ahead of the downward trend of the neutral interest rate.
Minneapolis Fed President Neel Kashkari was more reserved, warning that it was too early to judge whether tariff-induced inflation would be "sticky." However, he was particularly optimistic about the performance of the labor market and expected that the recent weak job creation would regain momentum.
Kansas City Fed President Jeffrey Schmid made hawkish remarks on Monday, emphasizing that the Fed must maintain its credibility in fighting inflation, pointing out that current inflation levels are too high, while believing that monetary policy adjustments are just right.
According to the CME Fed Watch tool, the market is currently betting on a 92.5% probability of a rate cut in October and a 78% probability of another rate cut in December.
Australia's private sector residential approvals fell 2.6% month-on-month to 9,027 units in August, in line with expectations and reversing a 1.3% increase in the previous month; seasonally adjusted building permits fell 6% month-on-month to 14,744 units, marking the second consecutive month of decline after a 10% drop in the previous month.
Data from the University of Melbourne on Tuesday showed that Australia's West Pacific Consumer Confidence Index fell sharply by 3.5% month-on-month to 92.1 in October, with the decline further widening from the previous value of 3.1%, marking the fastest decline since April this year; ANZ job advertisements in September fell sharply by 3.3% month-on-month, far exceeding the previous value of 0.3% decline.
The TD Securities-Melbourne Institute inflation gauge rose 0.4% month-on-month in September, reversing a 0.3% drop in the previous month; the annual rate climbed from 2.8% to 3%.
The Australian dollar is testing the 0.6600 level against the US dollar on Thursday, having previously broken through the nine-day exponential moving average (0.6597).
The Australian dollar is trading around 0.6600 against the US dollar. Technical analysis on the daily chart shows that the pair remains within an ascending channel, suggesting a continuation of the bullish trend. Furthermore, the 14-day relative strength index (RSI) remains firmly above 50, further reinforcing bullish momentum.
On the upside, the Australian dollar may test the 12-month high of 0.6707 against the US dollar set on September 17. If it can effectively break through this level, the exchange rate is expected to challenge the upper track of the ascending channel at 0.6800.
On the downside, the recent support lies at the key support zone formed by the 50-day exponential moving average at 0.6552 and the lower limit of the ascending channel at 0.6560. If this important support zone is broken, market sentiment may turn bearish and the exchange rate may fall to the four-month low of around 0.6414 set on August 21.
(AUD/USD daily chart, source: Yihuitong)
At 11:57 Beijing time, the Australian dollar was trading at 0.6601/02 against the US dollar.
- Risk Warning and Disclaimer
- The market involves risk, and trading may not be suitable for all investors. This article is for reference only and does not constitute personal investment advice, nor does it take into account certain users’ specific investment objectives, financial situation, or other needs. Any investment decisions made based on this information are at your own risk.
