empty
07.05.2025 12:32 AM
Australian Dollar Hits New Highs

The Australian dollar updated its five-month high against the USD at the start of the new week. NAB (National Australia Bank) revised several of its forecasts concerning the Australian economy and the national currency. NAB now expects the AUD/USD exchange rate to reach around 0.7000 by year-end, near the highs seen on September 30 last year. According to NAB, the aussie's strength is primarily driven by expectations of further USD weakness, as the greenback continues to look increasingly vulnerable.

As for other forecasts, NAB has lowered its GDP growth projection from 2.25% to 2% and raised its forecast for the peak unemployment rate from 4.2% to 4.4%. Much of the revision is due to external factors—chiefly the new U.S. tariff policy—and similar downward adjustments are being made across all major economies, including Japan, Europe, China, and the UK. Australia is less affected by the "Independence Day" trade measures, as exports to the U.S. account for less than 5% of its total exports, an undeniable advantage supporting the Australian dollar's resilience. Indirect pressure via China is a greater concern, which is why Australia is keen for the U.S. and China to reach a tariff agreement and prevent global trade wars from triggering a recession.

Solid Q1 results, manageable inflation, and growing external risks could prompt the Reserve Bank of Australia (RBA) to accelerate the normalization of its monetary policy. There are now forecasts—particularly from NAB and ANZ—that the RBA could cut the interest rate by 50 basis points in May, instead of the 25 previously expected, followed by two additional cuts that could bring the rate down to 3.1% by August. A faster pace of rate cuts might pressure the aussie due to declining yields, but more evident signs of an impending U.S. recession could emerge by summer, which would likely place even greater pressure on the U.S. dollar. Therefore, the AUD/USD exchange rate may rise further, despite RBA cuts—this remains the base-case scenario.

Net short positions in the AUD decreased by $287 million over the reporting week, down to -$3.188 billion. The reduction is slow, and the bearish imbalance has not yet been fully neutralized. Meanwhile, the estimated fair value remains above the long-term average.

This image is no longer relevant

As previously anticipated, AUD/USD broke out of its consolidation range to the upside. The next target is the resistance zone at 0.6540/50. If markets interpret Wednesday's FOMC meeting's outcome as more hawkish, a pullback toward 0.6400/10 is possible. However, the trend remains bullish, and any downward correction would be a justified opportunity for new long positions.

Kuvat Raharjo,
Analytical expert of InstaForex
© 2007-2025
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

What to Pay Attention to on May 20? A Breakdown of Fundamental Events for Beginners

There are no macroeconomic events scheduled for Tuesday, so the macroeconomic background will have no influence on price movements today. However, reports and data releases have rarely impacted currency pairs

Paolo Greco 06:02 2025-05-20 UTC+2

The Fed Allows Only One Rate Cut in 2025

The Federal Reserve continues to remain silent this year. While the European Central Bank has already cut interest rates three times and the Bank of England twice, the FOMC

Chin Zhao 00:40 2025-05-20 UTC+2

AUD/USD. RBA May Meeting: Preview

The Reserve Bank of Australia (RBA) will conclude its meeting on Tuesday, May 20, which may result in a softening of monetary policy parameters. The "dovish" scenario is the most

Irina Manzenko 00:40 2025-05-20 UTC+2

The Dollar Has Sold America Out Completely

Overall, the strength of the EUR/USD uptrend remains intact. The erosion of confidence in the U.S. dollar outweighs the divergence in monetary policy between the Fed and the ECB. Technical

Marek Petkovich 00:40 2025-05-20 UTC+2

AUD/USD. Analysis and Forecast

Spot prices for the AUD/USD pair remain within the familiar range held over the past month, as traders await a fresh catalyst before committing to the next directional move

Irina Yanina 18:22 2025-05-19 UTC+2

WTI – West Texas Intermediate. WTI Crude Holds Modest Intraday Losses

Today, West Texas Intermediate (WTI) crude oil is holding modest intraday losses. Uncertainty surrounding the ongoing US-Iran nuclear talks, along with rising tensions between Estonia and Russia following Sunday's detention

Irina Yanina 18:16 2025-05-19 UTC+2

USD/CAD. Analysis and Forecast

On Monday, the first trading day of the week, the USD/CAD pair attempted to gain significant upward momentum during the Asian session, but the European session failed to support this

Irina Yanina 18:03 2025-05-19 UTC+2

Bitcoin falls prey to crooks

Trust in the financial world is not exclusive to the US dollar. News that scammers have stolen data from approximately 197,000 clients of Coinbase — the world's largest crypto exchange

Marek Petkovich 13:20 2025-05-19 UTC+2

Are There Reasons for the Market Rally to Continue? (Possible Decline in AUD/USD and Growth in GBP/USD)

The coming week is expected to be light on major events or dramatic headlines—no new promises from Donald Trump to shake the world. Nevertheless, there will still be factors worth

Pati Gani 09:52 2025-05-19 UTC+2

The Market Has Gone Too Far

Nothing seems to matter. One would think that after the White House signed trade agreements with Britain and China, and following Donald Trump's visit to the Middle East, the S&P

Marek Petkovich 09:18 2025-05-19 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.