Australian dollar rises as inflation moderates, impacting monetary policy outlook

AUDUSD Analysis

Performance after Monday
Period	Pct	Chg	Momentum
Monday	0.74%	48.3 Pips
Week to-date	0.77%	50 Pips
June	0.03%	1.7 Pips

Upcoming key events (London Time)

Tue 02:30 PM USD Federal Reserve Chair Jerome Powell speech
Wed 02:30 AM AUD Retail Trade Turnover (seasonally adjusted) (1-mth)

What happened lately

Australia’s TD Securities Inflation report revealed a decline in the inflation rate for the 12-month period ending in June 2025, lowering from 2.6% in May to 2.4% in June. This moderation in inflation may signal that the Australian economy is experiencing less price pressure, which could influence the Reserve Bank of Australia’s future monetary policy decisions. With inflation approaching the bank’s target range, the central bank may maintain or even consider easing its current interest rate policy to further support economic growth.

For the AUDUSD currency pair, the rise of 0.74% to 0.65783 on Monday, along with an end-of-June increase of 0.03%, suggests some near-term appreciation of the Australian dollar against the US dollar. The reduced inflationary pressures in Australia might lend more stability to the AUD, as it becomes less likely for aggressive rate hikes to temper inflation, which often tend to weigh on the currency.

In the coming days, several events could impact AUDUSD. Notably, on the US side, Federal Reserve Chair Jerome Powell is scheduled to give a speech, which usually holds significant sway on market sentiment and USD movements, especially if remarks indicate shifts in monetary policy direction. On the Australian front, the upcoming Retail Trade Turnover data, seasonally adjusted for a monthly review, will be a key indicator of domestic economic activity. Strong performance in retail trade could provide further support to the Australian currency.

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What can we expect from AUDUSD today?

AUDUSD on Monday rose 0.74% to 0.65783. Price is above 9-Day EMA while Stochastic is rising in overbought zone.

Updated daily direction for AUDUSD looks bullish as the pair ended higher after Monday trading session.

Looking ahead for the day, immediate upside resistance level is R1 at 0.66001 with break above could target R2 at 0.6622 or figure level area. While towards the downside, we are looking at daily low of 0.65224 as an important support. Break below this level could weaken the current bullish momentum. A break above 0.65831 may suggest continuation after recent positive movement.

For the week to-date, take note that AUDUSD is bullish as the pair continued to trade higher and is up by 0.77% over the past few days.

AUDUSD ended month of June trading session up by 0.03% or 1.7 pips higher.

Key levels to watch out:

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