The Australian dollar (AUD) faced significant selling pressure, resulting in a decline against the U.S. dollar (USD), primarily driven by disappointing GDP figures from Australia. Recent data revealed that Australia’s economy grew by just 0.3% in the third quarter, falling short of expectations and marking the slowest growth rate since the pandemic. This weaker performance has intensified speculation about an early interest rate cut from the Reserve Bank of Australia, with markets now fully anticipating a reduction by April 2025.
Compounding these concerns, economic struggles in China continue to impact regional currencies like the AUD. A recent private survey indicated a slowdown in business activity within China’s services sector amidst ongoing challenges related to the property market and overall global demand. Additionally, geopolitical tensions, including new U.S. export controls aimed at tech advancements in China, have raised fears of a renewed trade war between the U.S. and China, further pressuring the Australian economy.
On the other hand, data released from the U.S. Job Openings and Labor Turnover Survey showed a solid increase in job openings for October, which alleviated fears of a drastic slowdown in the U.S. labor market. This positive labor news may influence the Federal Reserve’s approach to interest rates, as expectations grow around potential inflationary pressures from upcoming expansionary policies. However, USD traders are exercising caution ahead of a speech by Fed Chair Jerome Powell, causing the AUD/USD pair to find some support around the 0.6400 level.
As traders await further economic indicators, including the ADP private-sector employment report and the nonfarm payrolls data, the focus will continue to be on how these factors will shape the future of interest rate expectations. Nevertheless, the current economic signals suggest a likelihood of further declines for the AUD/USD pair, putting downward pressure on the currency pair in the near term.
From a technical standpoint, a drop below the 0.6400 mark could lead to a significant breakout, signaling deeper losses ahead. The daily chart shows oscillators remaining in negative territory, indicating room for further downward movement. Conversely, a recovery past 0.6450 could attract selling interest near the 0.6500 level, although a sustained increase might enable bullish traders to regain momentum and potentially reach higher resistance levels around 0.6600.
