Australian Dollar underperforms amid risk-off mood
- The Australian Dollar comes under pressure due to risk-off market mood.
- A significant increase in hawkish Fed bets has dampened the appeal of riskier assets.
- Sticky US CPI report for August boosts hawkish Fed expectations.
The Australian Dollar (AUD) is down against its major currency peers, trading 0.45% lower at around 0.7135 against the US Dollar (USD) during the European trading session on Monday. The Australian currency tumbles as market sentiment turns risk-averse due to a further escalation in Federal Reserve (Fed) interest rate hike expectations.
Australian Dollar Price Today
The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the weakest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.53% | 0.31% | 0.63% | 0.10% | 0.55% | 0.78% | 0.41% | |
| EUR | -0.53% | -0.20% | 0.07% | -0.45% | 0.00% | 0.25% | -0.13% | |
| GBP | -0.31% | 0.20% | 0.27% | -0.22% | 0.22% | 0.45% | 0.00% | |
| JPY | -0.63% | -0.07% | -0.27% | -0.52% | -0.06% | 0.15% | -0.26% | |
| CAD | -0.10% | 0.45% | 0.22% | 0.52% | 0.43% | 0.66% | 0.24% | |
| AUD | -0.55% | -0.00% | -0.22% | 0.06% | -0.43% | 0.24% | -0.23% | |
| NZD | -0.78% | -0.25% | -0.45% | -0.15% | -0.66% | -0.24% | -0.45% | |
| CHF | -0.41% | 0.13% | -0.01% | 0.26% | -0.24% | 0.23% | 0.45% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).
At press time, S&P 500 futures are down 0.66% to near 7,600, reflecting a weak risk-appetite of investors.
FOMC set for first hike since 2023 as market eyes Warsh’s guidance
Strategists at Brown Brothers Harriman (BBH) expect the FOMC to break its streak of five consecutive holds, noting that “the FOMC is poised to deliver a 25bps hike to a target range of 3.75%-4.00% on Wednesday after five straight holds, marking its first hike since July 2023.” BBH argues that “persistently above target US inflation and a stable labor market justify a rate increase,” and points out that positioning is already heavily skewed toward such an outcome, with “Fed funds futures price in roughly 90% odds of a hike this week.” Against that backdrop, BBH stresses that “the vote split, updated Summary of Economic Projections, and Fed Chair Kevin Warsh’s press conference will guide the market reaction,” as investors parse the decision for signals on the policy path ahead.
A sharp repricing of Fed’s interest rate expectations has also resulted in a significant jump in the US Dollar. As of writing, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades 0.4% higher to near 99.50.
On the domestic front, investors await Reserve Bank of Australia (RBA) Governor Michele Bullock’s speech before the House of Representatives Standing Committee on Economics in Canberra on Friday.
The comments from RBA’s Bullock are expected to have a significant impact on expectations for Australia’s interest rate outlook.
AUD/USD Technical Analysis
In the daily chart, AUD/USD trades at 0.7134, holding a modest bearish near-term bias as spot remains under the 20-period exponential moving average (EMA) at 0.7156. The pair has slipped back below this short-term trend gauge, suggesting a loss of upside traction, while the Relative Strength Index (RSI) at 48.8 has retreated toward neutral territory, hinting at fading bullish momentum rather than outright oversold conditions.
On the topside, initial resistance is aligned with the 20-day EMA at 0.7156, which caps recovery attempts and would need to be reclaimed to reopen a more constructive tone toward recent highs. On the downside, the absence of nearby moving average or Fibonacci supports leaves price action exposed to further slippage, with traders likely to look to prior swing lows as the next structural floors if the pair continues to retreat beneath the current level.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Economic Indicator
RBA Interest Rate Decision
The Reserve Bank of Australia (RBA) announces its interest rate decision at the end of its eight scheduled meetings per year. If the RBA is hawkish about the inflationary outlook of the economy and raises interest rates it is usually bullish for the Australian Dollar (AUD). Likewise, if the RBA has a dovish view on the Australian economy and keeps interest rates unchanged, or cuts them, it is seen as bearish for AUD.
Read more.Next release: Tue Sep 29, 2026 04:30
Frequency: Irregular
Consensus: -
Previous: 4.35%
Source: Reserve Bank of Australia
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