Fed hawks lift USD to 19-month high as Australian Dollar tests 0.68

• With a 0.67% fall, AUD/USD nears key support at 0.6800.
• The Dollar reaches 19-month highs as markets anticipate Fed tightening.
• Ahead of US PPI, the probability of a December rate rise climbs to 87%.

Slightly weaker-than-expected US employment figures failed to prevent further losses for the Australian Dollar on Thursday, as hawkish voices at the Federal Reserve (Fed) supported the US Dollar. The Greenback reached 19-month highs, while AUD/USD fell 0.67% and traded around 0.6800.

Hawkish Fed comments push AUD/USD lower

Expectations of a Fed rate rise of at least 25 basis points in December lifted the US Dollar Index (DXY) to a multi-month high of 103.24. The index tracks the Dollar against six currencies.

With most policymakers adopting a moderately hawkish position, comments from Fed officials took precedence over US economic releases on Thursday.

Although Cleveland Fed’s Beth Hammack warned of a deteriorating inflation outlook, she favoured a gradual approach to interest rates. Inflation has been “well above target,” according to Chicago Fed’s Austan Goolsbee. San Francisco Fed’s Mary Daly, meanwhile, recognised the need for additional tightening, saying inflation pressure “is up, not down.” Kansas City Fed’s Jeffrey Schmid also said the Fed had yet to defeat the inflation enemy.

According to the CME FedWatch Tool, money markets assigned an 87% probability to a 0.25% Fed rate rise. A larger, 50-basis-point increase retained a slim 13% probability.

For the week ending 7 November, US initial jobless claims increased to 200K, exceeding both the 195K forecast and the previous reading of 191K. Continuing claims, by contrast, declined to 1.697 million from 1.717 million, pointing to a resilient labour market. Subsequently, Existing Home Sales recorded a -5.5% change compared with September, falling to 3.75 million from 3.97 million.

On the geopolitical front, a social media post by US President Donald Trump said the US did not need an agreement with Iran, keeping open the possibility of further strikes. This contradicted his statement two days earlier that no new strikes were needed.

Australia’s economic calendar is sparse on Friday, though activity is set to pick up next week with the publication of the Reserve Bank of Australia (RBA) minutes from its latest meeting and a speech by Governor Michelle Bullock on 17 November.

The US calendar includes the US Producer Price Index (PPI). Forecasts point to headline annual PPI accelerating to 6.6% from 6.3%, while the core measure is expected to hold at 5%.

AUD/USD Price Forecast: Technical indicators point to continued pressure

Trading at 0.6805 on the daily chart, AUD/USD retains a bearish short-term bias. Spot remains well beneath the cluster of three simple moving averages around 0.7020 and a succession of breached rising trend lines beginning at 0.6926. At 32.58, the Relative Strength Index (14) sits just outside oversold territory, suggesting persistent selling pressure rather than clear exhaustion. The pair therefore remains exposed to further weakness while below these technical barriers.

Any recovery would first encounter resistance at the former rising support trend line near 0.6926. Beyond that lie the three simple moving averages (SMA) around 0.7020 and a further breached trend line at 0.7137, followed by a more substantial horizontal hurdle near 0.7198. Should the decline continue, the principal support lies around 0.6342, at the previous break of a falling resistance trend line. Buyers would be expected to show greater interest at that level.

(The technical analysis of this story was written with the help of an AI tool. Know more.)