The Australian dollar remained firm on Monday, defying a broadly steady US dollar as traders looked ahead to the release of the US Personal Consumption Expenditures (PCE) Price Index, a key inflation gauge for the Federal Reserve. The aussie hovered just above 0.6480, showing resilience despite muted market conditions.
Currency markets were largely range-bound ahead of the data, but the Australian dollar found support from firmer commodity prices and cautious optimism around China’s economic outlook. With Australia’s economy closely tied to Chinese demand, any signs of stabilization in China tend to lend support to the local currency.
AUD/USD 1-D Chart as of April 30th, 2025 (Source: TradingView)
Meanwhile, the US dollar held steady, underpinned by strong economic data and tempered expectations for immediate rate cuts by the Federal Reserve. The upcoming PCE report is expected to offer more clarity on inflation trends, potentially influencing the Fed’s near-term policy stance.
Despite a stable greenback, analysts noted the aussie’s relative strength reflects improved risk sentiment and steady investor confidence in Australia’s macroeconomic backdrop. “The market is staying long on the AUD while keeping a close eye on US data,” one FX strategist said.
Still, the path forward remains data-dependent. A higher-than-expected PCE reading could reignite dollar strength and weigh on risk currencies, while a softer print might extend support for the aussie. Markets are also tracking commentary from Fed officials for any shifts in tone.
For now, AUD/USD remains well-supported, with traders balancing domestic and external drivers ahead of what could be a pivotal data release later in the week.
