AUD/USD trades around 0.6450 after pulling back from five-month highs
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The AUD/USD pair retreats from Monday’s five-month high of 0.6493. The US Dollar is gaining strength as the Fed is widely expected to keep interest rates unchanged on Wednesday. NAB has lifted its year-end forecast for the pair to 0.70, citing a sustained bear trend in the US Dollar. AUD/USD is retreating from a five-month high of 0.6493 reached on Monday, slipping to around 0.6450 during the Asian session on Tuesday. The decline comes as the US Dollar (USD) strengthens ahead of the Federal Reserve’s (Fed) upcoming monetary policy decision on Wednesday. While the Fed is widely expected to hold rates steady, investor focus remains on Chair Jerome Powell’s remarks, especially amid tariff-related uncertainties and growing pressure from President Donald Trump to cut rates. Adding to the mix, Treasury Secretary Scott Bessent said Monday that the US is “very close to some deals,” echoing Trump’s earlier weekend comments suggesting trade agreements could be finalized soon. Trump confirmed negotiations are ongoing but ruled out talks with Chinese President Xi Jinping this week. Meanwhile, China’s Commerce Ministry stated last Friday that it is reviewing a US proposal to restart trade discussions. On the data front, the US ISM Services PMI rose to 51.6 in April, surpassing expectations of 50.6 and improving from 50.8 in March. The New Orders Index climbed to 52.3 (from 50.4), while the Services Employment Index improved to 49 (from 46.2). The Australian (AUD) found support after Australian Prime Minister Anthony Albanese secured a second three-year term in the 2025 Federal Election, marking significant gains in Saturday’s results. Albanese pledged a “disciplined” government focused on cost-of-living relief, renewable energy, tax cuts, housing, and healthcare. Westpac CEO noted that the “worst is behind us” regarding consumer and business stress, with stronger-than-expected M&A financing demand. The bank is forecasting a 25bp…
Filed under: News - @ May 6, 2025 1:18 am