If your AUD/USD charts show approximately 0.6630, they may display incorrect pricing. Retail FX charts usually rely on the bid price, which can show around 0.6630 due to low interest. In contrast, the wholesale FX market has a trading price that remains close to Friday’s level, around 0.6645.
On Monday mornings, market liquidity is very limited until more Asian centres resume, which can cause prices to fluctuate. Therefore, exercising caution is recommended.
Monday Morning Market Dynamics
The thin liquidity we’re seeing on this Monday morning, with the wholesale AUD/USD price holding around 0.6645, is a clear warning sign. These conditions often lead to sharp, unpredictable price swings before London and New York trading begins. For derivative traders, this suggests that setting wider stops on any early-week positions is a prudent move to avoid getting shaken out by noise.
Looking ahead, we remember the Reserve Bank of Australia held rates steady at its August 2025 meeting, citing worries about the stubbornly high Q2 2025 inflation figure which came in at 3.8%. This hawkish stance is providing some support for the Aussie dollar, but the market is questioning how long it can last. Any options strategies should account for potential shifts in RBA guidance in their next statement.
On the other side of the pair, last week’s US CPI data for August 2025 came in slightly hotter than expected, reinforcing the ‘higher for longer’ narrative from the Federal Reserve. This strengthens the US dollar and puts a ceiling on any significant AUD/USD rallies. We see this reflected in interest rate futures, which have recently priced out any chance of a Fed rate cut before the end of 2025.
Commodity Markets Impact
We also have to watch the commodity markets, as they are a major driver for the Australian economy. Iron ore prices, a key export, have recently slipped below the critical $100 per tonne level due to ongoing concerns about industrial demand from China. This external pressure is a significant headwind for the Aussie and supports a bearish outlook.
Given these conflicting forces, we expect the AUD/USD to remain largely range-bound but with a downward bias in the coming weeks. Selling out-of-the-money call options or establishing bear call spreads could be an effective way to collect premium while defining risk against any unexpected upside moves. These strategies would profit from both sideways movement and a gradual decline towards the 0.6500 level, a key support area we saw tested back in May 2025.
