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Japanese Yen and Aussie Dollar Forecasts: Rate Differentials on the Move, USD/JPY Eyes 145

USDJPY – Daily Chart – 250825

See today’s full USD/JPY forecast with chart setups and trade ideas.

AUD/USD: Inflation in Focus as Traders Eye a November RBA Rate Cut

Turning to the AUD/USD pair, the RBA cut interest rates this month as inflation cooled. A further easing in inflation could boost expectations of further policy easing in the fourth quarter. On Wednesday, August 27, the Monthly CPI Indicator may affect demand for the Aussie dollar. Economists expect the annual inflation rate to rise from 1.9% in June to 2.2% in July.

A higher-than-expected reading could temper expectations of a Q4 RBA rate cut, lifting the appetite for the Aussie dollar. Conversely, a softer inflation print may bolster bets on further policy easing. This week’s inflation data could be crucial for the AUD/USD pair given Fed Chair Powell’s policy pivot on Friday, August 22. AUD/USD rallied 1.09% to close the session at $0.64898 on Powell hinting at a September rate cut.

When do economists expect the RBA to ease policy further?

AMP Head of Investment Strategy and Chief Economist Shane Oliver projected a November rate cut and further policy easing in H1 2026, stating:

“We continue to see the RBA cutting rates again in November, February and May taking the cash rate down to 2.85%.”

AUD/USD: Key Scenarios to Watch

  • Bearish AUD/USD Scenario: Dovish RBA signals and softer inflation. These factors could push AUD/USD toward the 200-day EMA and $0.6450 support level.
  • Bullish AUD/USD Scenario: Hawkish RBA rhetoric and hotter inflation. These factors could send AUD/USD above the 50-day EMA, bringing the $0.6550 resistance level into play.

Explore our full AUD/USD analysis, including key trends and trade data, here.

AUD/USD Daily Outlook: Will US Data Narrow the Rate Differential?

While economists are betting on a November RBA rate cut, support for a September Fed rate cut sent AUD/USD toward $0.65.

Weaker-than-expected US economic data could raise expectations of multiple Fed rate cuts, narrowing the rate differential. A narrower rate differential may push the pair above the 50-day EMA. A break above the 50-day EMA and the $0.65 level may pave the way to the $0.6550 suppot level.

Conversely, stronger-than-expected data could signal a less dovish Fed rate path, potentially widening the rate differential. Under this scenario, AUD/USD could fall toward the 200-day EMA and the $0.6450 support level.

Beyond the data, traders should monitor FOMC members’ comments on the economy, inflation, and monetary policy.

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