Australian Dollar slides further below 0.6850 to new low since January as bullish USD weighs

• Following the US CPI release, the USD builds on its gains, leaving AUD/USD under selling pressure for a third consecutive day.
• The USD reaches its highest level since April 2025 as expectations of a Fed rate rise strengthen and geopolitical risks persist.
• Further pressure from the RBA’s dovish stance reinforces the case for more losses in the Aussie.

At around 0.6830, AUD/USD is trading 0.25% lower on the day after reaching its weakest level since January in Thursday’s early European session. The pair has declined for a third consecutive day, also recording its fifth daily fall in the past five days. With several adverse factors at play, spot prices appear vulnerable to further weakness.

Since the Reserve Bank of Australia (RBA) delivered a dovish rate rise earlier this November, the Australian Dollar (AUD) has lagged. The decision featured a 6-3 vote split and dropped explicit guidance on further tightening. By contrast, a growing conviction that the US Federal Reserve (Fed) will raise borrowing costs again in December has helped the US Dollar (USD) advance for a third consecutive day, adding to the pressure on AUD/USD.

Tuesday’s stronger-than-expected US consumer inflation figures for October, together with hawkish remarks from several Fed officials, reinforced those expectations. Traders have also begun to price in the possibility of a sizeable 50-basis-point (bps) increase next month. Alongside geopolitical risks arising from the US-Iran stand-off over the Strait of Hormuz, this provides further support for the safe-haven dollar and reinforces the bearish near-term outlook for AUD/USD.

Reports indicate that US forces launched a series of strikes on Iran’s Qeshm Island, while Tehran targeted ship navigation systems on the Omani island of Didamar at the entrance to the Persian Gulf. Hopes of a diplomatic settlement to the continuing conflict were further dampened by comments from Iran’s Armed Forces Deputy Chief of Staff Brigadier General Kioumars Heidari. He said Tehran had closed the strategic waterway and would reopen it only on the orders of the leader of the revolution.

Attention now turns to the US weekly initial jobless claims release. Along with comments from Fed officials and further developments in the Middle East crisis, the data could influence the dollar and give AUD/USD fresh impetus. Even so, the fundamental backdrop appears firmly favourable to sellers, suggesting that any recovery attempt could attract renewed selling and is more likely to fade fairly quickly.

AUD/USD extends its decline on the daily chart

Technical Outlook Remains Bearish

A recent failure to hold above the 100-day Simple Moving Average (SMA) at 0.7026, followed by a break beneath 0.6900, leaves AUD/USD with a bearish near-term bias. Initial significant resistance now lies at 0.6900. A recovery above that level would be needed to temper the immediate bearish outlook and pave the way for a retest of the 100-day SMA at 0.7026.

(An AI tool assisted in writing the technical analysis for this article. Find out more.)