Explore eFXplus Derived Data That Drive Results
A Data Partner of:
Refinitiv
Dec 17 - 11:55 AM

AUD/USD - COMMENT-Fed To The Rescue? AUD/USD Bulls Can Only Hope

By Christopher Romano  —  Dec 17 - 10:10 AM

AUD/USD fell Tuesday and neared its 13-month low struck last week, with technicals highlighting downside risks and perhaps the Fed the only source of a potential lifeline for the aussie.

An upside surprise to U.S. November retail sales indicated the consumer remains upbeat and can continue to underpin U.S. economic growth.

Australian economic growth is in question however.
December S&P Global composite PMI dropped into contraction territory, and an unexpected downside surprise in Q3 GDP fueled concern of slower growth and increased the probability of RBA cuts.

U.S. and Australian rates markets have roughly 75bps of cuts priced in for both the Fed and RBA by the end of 2025, which would leave the U.S. currency's yield advantage over Australia's dollar intact.

Investors will focus on Wednesday's Fed rate decision, the Summary of Economic Projections and Chair Jerome Powell's news conference.

A 25bps cut is widely expected, so the SEP and Powell may have more impact on markets.

Should Fed policymakers increase their growth and inflation projections and Powell indicate either a slower pace of cuts or a pause in easing, the U.S. dollar's yield advantage could increase sharply.

AUD/USD might then end its current consolidation phase with a move to fresh trend lows, increasing the probability of a test of 2022's yearly low at 0.6170.

That will leave aussie bulls hoping for a less hawkish outcome from the Fed.

For more click on FXBUZ

Source:
London Stock Exchange Group | Thomson Reuters

Subscription

  • eFXplus
  • End-user license agreement (EULA)

About

  • About
  • Contact Us

Legal

  • Terms of Service
  • Privacy Policy
  • Disclaimer
© 2025 eFXdata · All Rights Reserved
!