AUD/USD Forecasts & Analysis: Will AUD/USD Go Up Or Down?

In recent years, forex investment has gradually become a popular investment option. In forex investment investment, the US Dollar, Australian Dollar, RMB, etc. are popular choices for savvy investors around the world.

The Australian Dollar, the world’s fifth most-traded currency, has been falling for the past few years, but this year has started to ease. So why has the Australian Dollar been falling? Is it worth the investment? What is its future trend? This article will make detail analysis for you.

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Table of Contents

Latest News & Updates on AUD/USD

What is Australian Dollar?

What is the AUD/USD Pair?

AUD/USD Overview

AUD/USD History Analysis

AUD/USD Technical Analysis

AUD/USD Price Forecast

How to Trade AUD/USD?

Conclusion

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Latest News & Updates on AUD/USD

The AUD/USD pair experiences significant upward momentum following the release of positive Australian employment data on December 12 and moves away from the year-to-date lows achieved the previous day. The Australian Bureau of Statistics (ABS) reported a stunning drop in the Unemployment Rate, to 3.9% in November against consensus estimates fora slight increase to 4.2% from the previous month’s 4.1%. Additional details revealed that the number of employed people rose more than expected, by 35.6K on the back of a solid jump in full-time jobs. This indicates a re-tightening of labour market conditions and weakens the case for a February interest rate cut by the Reserve Bank of Australia (RBA), which, in turn, provides a notable boost to the Australian Dollar (AUD).

Meanwhile, China pledged to implement more proactive fiscal measures and moderately looser monetary policy in 2025 as part of the government’s efforts to boost domestic consumption. This turns out to be another factor that benefits the Aussie, which, along with a modest US Dollar (USD) downtick, further contributes to the AUD/USD pair’s intraday move up. Meanwhile, the US consumer inflation data released on December 11 reinforced anticipations that the Federal Reserve (Fed) will implement a third consecutive rate cut at its policy meeting at the end of December next week. However, the official data also highlighted that progress in reducing inflation towards the Fed’s 2% target has stagnated, capping the recent surge in the USD to a two-week high.

What is Australian Dollar?

Before knowing whether Australian Dollar is a good investment, we need to have a simple understanding of what Australian Dollar is.

The Australian Dollar refers to Australia’s official currency and is abbreviated as AUD. The Australian Dollar has been the official currency of several regions, such as Norfolk Island, Christmas Island, and Keeling Islands, and is one of the mainstream currencies in the world. The Australian Dollar officially became a free-floating currency in 1983.

Australia’s central bank, the Reserve Bank of Australia (RBA), manages the Australian Dollar (AUD), decides the country’s monetary policy, and regulates the issuance and supply of currency. On February 14, 1966, the Australian Dollar was adopted, replacing the Australian pound at a conversion rate of 2 AUD to 1 Australian pound.

The popularity of AUD among traders is due to various factors related to geology, geography, and government policy. Namely, Australia is among the richest countries in the world in terms of natural resources, including metals, coal, diamonds, meat, and wool.

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What is the AUD/USD Pair?

The AUD/USD pair represents the exchange rate between the Australian Dollar (AUD) and the United States dollar (USD). Notably, the AUD/USD pair is one of the most commonly-traded currency pairs in the foreign exchange (forex) market. As a significant currency pair in the global forex market, the AUD/USD pair offers opportunities for traders and investors to profit from changes in the exchange rate between the Australian Dollar and the US dollar.

The AUD/USD currency pair tends to be negatively correlated with the USD/CAD (the Canadian dollar), as well as the USD/JPY (the Japanese yen) pair, largely because the dollar is the quote currency in these cases. In particular, the AUD/USD pair often runs counter to the USD/CAD, as both AUD and CAD are commodity block currencies.

Generally speaking, the exchange rate of the AUD/USD pair can be influenced by various economic and political factors in both Australia and the United States, such as economic growth, inflation rates, interest rate decisions by the central banks, political stability, and trade relations between the two countries.

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AUD/USD Overview

The following chart is the AUD/USD price chart:

AUSTRALIAN DOLLAR / U.S. DOLLAR

Key data points

(Data from FX_IDC)

AUD/USD History Analysis

Analyzing the detailed historical exchange rate of AUD/USD from 2022 to the present in part 3 can provide traders with a broad overview of exchange rate fluctuations and the main factors impacting them. This also serves as a basis for traders to make forecasts about the future price trends of these currency pairs.

Here’s a brief historical analysis of the AUD/USD currency for the year 2022, 2023, and 2024:

2022

In 2022, the AUD/USD pair started the year trading at approximately 0.72 levels. Throughout the year, the pair exhibited significant volatility, Various factors influenced its fluctuations, including shifts in monetary policies by both the Federal Reserve (Fed) and the Reserve Bank of Australia (RBA), respective domestic economic conditions, global economic dynamics, and geopolitical tensions.

In March 2022, the Fed initiated a series of interest rate hikes aimed at combating rising inflation.  Although the RBA also implemented rate increases, they remained relatively lower than those of the Fed. This disparity primarily contributed to the downward trajectory of the AUD/USD exchange rate over the course of the year.

The pair reached its lowest point at 0.61 in mid-October before experiencing a modest recovery.  Ultimately, the AUD/USD pair concluded the year at around 0.68, reflecting the complex interplay of various economic and geopolitical factors that influenced its performance throughout the year.

2023

Following the upward trend from late 2022, the AUD/USD pair continued to climb and reached 0.71 by the end of January 2023, marking the highest level of the year.  Throughout 2023, the Federal Reserve (Fed) maintained high interest rates in the range of 5.25% to 5.5%, while the Reserve Bank of Australia (RBA) kept its rates at 4.35%.

Additionally, the positive growth of China, Australia’s largest trading partner, post-pandemic, was a significant factor in the economic landscape.  However, China slipped into deflation in July 2023, which negatively impacted the strength of the AUD.  Consequently, the AUD/USD pair entered a downward trend and traded at 0.61 by October 2023.

Then similar to the scenario in 2022, the AUD/USD pair experienced a recovery towards the end of the year. Ultimately, the pair closed the year at 0.68, reflecting the interplay of various economic factors, including the Fed’s high interest rates, the RBA’s monetary policy, and the economic performance of Australia’s largest trading partner, China.

2024

The AUD/USD’s value has flactuated between 64 – 66c throughout 2024. With the US dollar maintaining its stability and China’s economic activity not gaining steam, a sustained strengthening of the Australia dollar seemed out of reach.

However, the Aussie has swung wildly in recent months following:

US recession fears in August that tumbled global stock markets, heralded rate cuts by the Federal Reserve, and prompted a hawkish tilt by the Reserve Bank of Australia (RBA). The Aussie dropped as low as US63c in early August.

The Fed’s large 50 basis point cut to the US policy rate in September, bringing renewed optimism around a soft landing — combined with extra stimulus measures from China boosting hopes of growth. The AUD/USD was up around 0.68 – 0.69 in late September/early October.

As of writing the article, AUD/USD is  0.61947USD.

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AUD/USD Technical Analysis

The following sets the key technical analysis chart:

Oscillators

(Data from FX_IDC)

Moving Averages

(Data from FX_IDC)

Pivots

(Data from FX_IDC)

AUD/USD Price Forecast

Bolstered by upside surprises to inflation and RBA’s higher-for-longer narrative, the outlook in 2025 is for a strengthening AUD/USD.

Below are forecasts for the AUD/USD for the next 6 months from financial institutions worldwide for traders to reference:

• The economic report released by Westpac during the week of October 28th predicted that the Australian Dollar (AUD) would attain a value of 0.69 US cents by December 2024 and climb to 70c in the first quarter of 2025.
• As of August, the foreign exchange forecast by NAB indicated that the AUD/USD exchange rate would reach 0.69c by December 2024 and further increase to 0.71c by March 2025.
• ING, on the other hand, is forecasting that the exchange rate will hit US$0.69 by the fourth quarter of 2024 and will remain stable at 69c in March 2025.

12-Month Forecast For AUD/USD

Looking further ahead, bankers predict the Australian Dollar to continue to appreciate against the US dollar:

• Westpac anticipates that the value of the Australian Dollar (Aussie) will rise to 0.73c by December 2025.
• NAB projects a higher AUD/USD exchange rate of 0.75c by December 2025.
• ING believes that the Australian Dollar will attain a value of US$0.70 by the end of 2025.

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How to Trade AUD/USD?

AUD/USD is the fourth most traded currency pair in the forex market. Luckily,  AUD USDT-margined tokenized forex futures with a leverage of up to 50x is avaliable on BTCC. If you want to invest in AUD, you can start by loging in BTCC.

The following sets forth the step-by-step guidance for trading AUD USDT-margined tokenized forex futures on cryptocurrency exchange BTCC:

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Step Three: go back to the BTCC official homepage, choose “Futures” -“USDT-M Perpetual Futures Contract” -“Forex”, and find AUDUSDT trading pair.

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• Market Order: users place orders at the best price in the current market to achieve fast trading.
• Limit Order: Limit orders are a type of order to buy or sell futures at a price more favourable than the market price. When you buy at a price lower than the market price or sell at a price higher than the market price, the order will be in the form of a limit order.
• SL/TP Order: SL/TP orders are a type of order to buy or sell futures at a price less favourable than the market price. When you buy at a price higher than the market price or sell at a price lower than the market price, the order will be in the form of a SL/TP order.

Step Five: adjust the leverage multiple.

Please keep in mind that operating leverage carries the risk of liquidation. Leverage should be adjusted based on your financial status and risk tolerance.

Step Six: choose the lot size and set the SL/TP price .

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Step Eight: click the buy or sell button, and AUD USDT-margined tokenized forex futures futures contract order is completed.

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Conclusion

Fluctuations in the foreign exchange market are significantly influenced by the monetary policies of nations, as well as prevailing domestic and global economic conditions. As a result, traders must diligently monitor market dynamics and economic indicators to effectively understand these shifts, thereby enabling more informed forecasts and trading strategies.

In conclusion, the Australian Dollar (AUD) is anticipated to undergo considerable fluctuations in the coming years, driven by various economic factors such as global commodity prices, interest rate differentials, and geopolitical events. While the AUD/USD pair may present attractive opportunities for traders, it is essential to remain cognizant of the broader economic landscape and potential risks.

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