- AUD/USD recovers to 0.6160 on Monday, up 0.16%.
- US Dollar strength remains intact following robust NFP report.
- Dovish hints from the RBA keep the Australian dollar under pressure.
The Australian Dollar managed to regain optimism and put behind four consecutive daily pullbacks on Monday, gaining some traction shortly after hitting lows not seen since April 2020 near 0.6130. Despite the slight rebound, the currency remains weighed down by strong US employment data and a cautious outlook from the Reserve Bank of Australia (RBA).
Daily Market Summary: Australian Dollar Gains Some Ground Following Stellar US Jobs Report
- The US Bureau of Labor Statistics reported 256,000 new jobs last month, exceeding the forecast of 160,000; the November figure was revised from 227,000 to 212,000.
- The unemployment rate fell to 4.1%, while average hourly earnings fell from 4% to 3.9%.
- Traders now expect the Federal Reserve to cut rates just once in 2025, boosting the US dollar’s momentum. In addition, the US economic calendar will include the Consumer Price Index figures for December, which could determine the dynamics of the pair.
- The 10-year US Treasury yield soared near 4.80%, while the US Dollar Index (DXY) touched 109.96, its highest level since November 2022.
- The Australian Dollar remains under pressure due to the RBA’s dovish stance and weak Australian fundamentals, compounded by concerns over the slowdown in the Chinese economy.
AUD/USD Technical Outlook: Gains Remain Fragile as Oversold Signs Persist
AUD/USD rose 0.16% to 0.6160 on Monday, attempting to stabilize near the lowest level since April 2020. The Relative Strength Index (RSI) stands at 32, indicating a near oversold condition but showing a modest improvement.
Meanwhile, the MACD Indicator histogram prints rising red bars, suggesting that the bearish momentum has softened but not completely reversed. Although the pair has managed to arrest the decline, persistent headwinds, including a strong US Dollar and speculation about RBA rate cuts, continue to cloud the outlook.
Australian Dollar FAQs
One of the most important factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). As Australia is a resource-rich country, another key factor is the price of its largest export, iron ore. The health of the Chinese economy, its largest trading partner, is a factor, as is inflation in Australia, its growth rate and the Balance of Trade. Market sentiment, that is, whether investors bet on riskier assets (risk-on) or seek safe havens (risk-off), is also a factor, with the risk-on being positive for the AUD.
The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The RBA’s main objective is to maintain a stable inflation rate of 2%-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low ones. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former being negative for the AUD and the latter being positive for the AUD.
China is Australia’s largest trading partner, so the health of the Chinese economy greatly influences the value of the Australian Dollar (AUD). When the Chinese economy is doing well, it buys more raw materials, goods and services from Australia, which increases demand for the AUD and drives up its value. The opposite occurs when the Chinese economy does not grow as fast as expected. Therefore, positive or negative surprises in Chinese growth data usually have a direct impact on the Australian Dollar.
Iron ore is Australia’s largest export, with $118 billion a year according to 2021 data, with China being its main destination. The iron ore price, therefore, may be a driver of the Australian dollar. Typically, if the price of iron ore rises, the AUD also rises as aggregate demand for the currency increases. The opposite occurs when the price of iron ore falls. Higher iron ore prices also tend to result in a higher likelihood of a positive trade balance for Australia, which is also positive for the AUD.
The trade balance, which is the difference between what a country earns from its exports and what it pays for its imports, is another factor that can influence the value of the Australian dollar. If Australia produces highly sought-after exports, its currency will gain value solely from the excess demand created by foreign buyers wanting to purchase its exports versus what it spends on purchasing imports. Therefore, a positive net trade balance strengthens the AUD, with the opposite effect if the trade balance is negative.
Source: Fx Street

I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.