The AUD/USD pair trades 0.55% higher to near 0.7050 during the European trading session on Friday. The Aussie pair shows significant strength as the Australian Dollar (AUD) outperforms across the board amid growing expectations that the Reserve Bank of Australia (RBA) could tighten monetary conditions further in the near term.
Australian Dollar Price Today
The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the strongest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.05% | -0.13% | -0.02% | -0.16% | -0.36% | -0.11% | -0.15% | |
| EUR | 0.05% | -0.07% | 0.05% | -0.11% | -0.31% | -0.06% | -0.10% | |
| GBP | 0.13% | 0.07% | 0.15% | -0.04% | -0.24% | 0.01% | -0.03% | |
| JPY | 0.02% | -0.05% | -0.15% | -0.16% | -0.37% | -0.13% | -0.17% | |
| CAD | 0.16% | 0.11% | 0.04% | 0.16% | -0.21% | 0.03% | 0.00% | |
| AUD | 0.36% | 0.31% | 0.24% | 0.37% | 0.21% | 0.25% | 0.21% | |
| NZD | 0.11% | 0.06% | -0.01% | 0.13% | -0.03% | -0.25% | -0.04% | |
| CHF | 0.15% | 0.10% | 0.03% | 0.17% | -0.00% | -0.21% | 0.04% |
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).
There is a 33% chance that the RBA may raise rates again by 25 basis points (bps) to 4.1% in the policy meeting on March 17. A hike is fully priced in for May, with another one to come by the end of the year, Reuters reports.
Hawkish RBA prospects have accelerated due to surging oil prices amid conflicts in the Middle East between the United States (US), Israel, and Iran.
Meanwhile, the US Dollar (USD) trades almost flat ahead of the US Nonfarm Payrolls (NFP) data for February, which will be published at 13:30 GMT. The US NFP data will influence market expectations for the Federal Reserve’s (Fed) monetary policy outlook, as officials have been expressing concerns over labor market conditions for a longer period.
AUD/USD technical analysis
AUD/USD trades sharply higher at around 0.7050 as of writing. The near-term bias appears flat as spot trades close to the rising 20-day Exponential Moving Average (EMA) around 0.7046, keeping price action in a tight range.
The 14-day Relative Strength Index (RSI) has retraced inside the 40.00-60.00 range after staying above 60.00 for a longer period, indicating neutral momentum with a slight upside tilt rather than aggressive selling pressure.
Initial support emerges at 0.7000, where a psychological level aligns just beneath recent intraday lows, with a break exposing the late-January trough near 0.6940. Below that, deeper support appears at the February 6 low of 0.6900. On the topside, immediate resistance stands at the 20-day EMA near 0.7045, followed by last week’s closing area around 0.7085, while a sustained move above 0.7120 would signal a resumption of the broader advance.
(The technical analysis of this story was written with the help of an AI tool.)
RBA FAQs
The Reserve Bank of Australia (RBA) sets interest rates and manages monetary policy for Australia. Decisions are made by a board of governors at 11 meetings a year and ad hoc emergency meetings as required. The RBA’s primary mandate is to maintain price stability, which means an inflation rate of 2-3%, but also “..to contribute to the stability of the currency, full employment, and the economic prosperity and welfare of the Australian people.” Its main tool for achieving this is by raising or lowering interest rates. Relatively high interest rates will strengthen the Australian Dollar (AUD) and vice versa. Other RBA tools include quantitative easing and tightening.
While inflation had always traditionally been thought of as a negative factor for currencies since it lowers the value of money in general, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Moderately higher inflation now tends to lead central banks to put up their interest rates, which in turn has the effect of attracting more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in the case of Australia is the Aussie Dollar.
Macroeconomic data gauges the health of an economy and can have an impact on the value of its currency. Investors prefer to invest their capital in economies that are safe and growing rather than precarious and shrinking. Greater capital inflows increase the aggregate demand and value of the domestic currency. Classic indicators, such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can influence AUD. A strong economy may encourage the Reserve Bank of Australia to put up interest rates, also supporting AUD.
Quantitative Easing (QE) is a tool used in extreme situations when lowering interest rates is not enough to restore the flow of credit in the economy. QE is the process by which the Reserve Bank of Australia (RBA) prints Australian Dollars (AUD) for the purpose of buying assets – usually government or corporate bonds – from financial institutions, thereby providing them with much-needed liquidity. QE usually results in a weaker AUD.
Quantitative tightening (QT) is the reverse of QE. It is undertaken after QE when an economic recovery is underway and inflation starts rising. Whilst in QE the Reserve Bank of Australia (RBA) purchases government and corporate bonds from financial institutions to provide them with liquidity, in QT the RBA stops buying more assets, and stops reinvesting the principal maturing on the bonds it already holds. It would be positive (or bullish) for the Australian Dollar.
Source: https://www.fxstreet.com/news/aud-usd-price-forecast-remains-sticky-to-20-day-ema-for-almost-a-week-202603060844
