{"id":17206,"date":"2025-02-26T06:25:18","date_gmt":"2025-02-26T06:25:18","guid":{"rendered":"https:\/\/www.vtmarkets.com\/?p=17206"},"modified":"2025-02-26T06:25:18","modified_gmt":"2025-02-26T06:25:18","slug":"aussie-drops-to-two-week-low-on-rate-cut-bets","status":"publish","type":"post","link":"https:\/\/www.vtmarkets.com\/en-ca\/analysis\/aussie-drops-to-two-week-low-on-rate-cut-bets\/","title":{"rendered":"Aussie Drops to Two-Week Low on Rate Cut Bets"},"content":{"rendered":"\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"559\" src=\"https:\/\/www.vtmarkets.com\/en-ca\/wp-content\/uploads\/sites\/13\/2026\/03\/kiwi6-1024x559.png\" alt=\"\" class=\"wp-image-17000\" \/><\/figure>\n\n\n\n<p><strong>Key Points<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>AUD\/USD fell below $0.633<\/strong>, approaching a two-week low amid weak economic data.<\/li>\n\n\n\n<li><strong>Australia\u2019s Monthly CPI Indicator held at 2.5%<\/strong>, below the expected 2.6%, reinforcing rate-cut expectations.<\/li>\n\n\n\n<li><strong>RBA cut rates to 4.1% last week<\/strong>, signalling a cautious stance on future easing.<\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity is-style-dots\" \/>\n\n\n\n<p>The Australian dollar is struggling, slipping below <strong>$0.633<\/strong> as weaker-than-expected domestic data heightens expectations for further monetary easing by the <strong>Reserve Bank of Australia (RBA)<\/strong>. With <strong>inflation steady at 2.5%<\/strong>, missing forecasts of a slight increase, the case for a cautious central bank is growing stronger. This puts additional downward pressure on the currency, as traders price in a more dovish policy outlook.<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"twitter-tweet\" data-width=\"500\" data-dnt=\"true\"><p lang=\"en\" dir=\"ltr\">Aussie &quot;Big Four&quot; banks cut rates, mirroring central bank <a href=\"https:\/\/t.co\/j5NwVwZp8S\">https:\/\/t.co\/j5NwVwZp8S<\/a> <a href=\"https:\/\/t.co\/dzOO7chSqr\">pic.twitter.com\/dzOO7chSqr<\/a><\/p>&mdash; Reuters (@Reuters) <a href=\"https:\/\/twitter.com\/Reuters\/status\/1891709278236381316?ref_src=twsrc%5Etfw\">February 18, 2025<\/a><\/blockquote><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<p><strong><a href=\"https:\/\/www.abs.gov.au\/statistics\/industry\/building-and-construction\">Construction output<\/a><\/strong> also missed the mark, rising only <strong>0.5% in Q4<\/strong>, well below market expectations of <strong>1.0%<\/strong> and slowing sharply from the <strong>2.0% growth<\/strong> in Q3. This indicates that higher interest rates have already begun weighing on economic activity, reinforcing the case for further easing by the <strong>RBA<\/strong> in the coming months.<\/p>\n\n\n\n<p>While the <strong><a href=\"https:\/\/www.rba.gov.au\/speeches\/2025\/mc-gov-2025-02-18.html#:~:text=As%20you%20know%20the%20Board,to%20address%20those%20upside%20risks.\">RBA\u2019s recent 25-basis-point rate cut to 4.1% <\/a><\/strong>was widely expected, policymakers have signalled a more cautious approach moving forward. However, the recent string of weak economic data, combined with external pressures, may force them to act sooner than anticipated. <strong>Futures markets are now pricing in at least one more rate cut by mid-2025<\/strong>, a shift that has further weighed on the <strong>Aussie dollar<\/strong>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\">Pending Tariffs Weigh on AUD<\/h2>\n\n\n\n<p>Beyond domestic concerns, the <strong>Aussie dollar<\/strong> is facing additional headwinds from <strong>US trade policy<\/strong>. <strong><a href=\"https:\/\/www.piie.com\/blogs\/realtime-economics\/2025\/trumps-trade-war-timeline-20-date-guide\" title=\"\">President Donald Trump\u2019s latest tariff proposals<\/a><\/strong>, particularly an investigation into <strong>potential duties on copper imports<\/strong>, have raised fears of increased trade disruptions. Given that <strong><a href=\"https:\/\/oec.world\/en\/profile\/country\/aus#:~:text=Exports%20The%20top%20exports%20of,Chinese%20Taipei%20(%2417.4B).\" title=\"\">Australia is a major exporter of metals and raw materials<\/a><\/strong>, these developments could further weaken its trade outlook.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\">Technical Analysis<\/h2>\n\n\n\n<p>The <strong>AUD\/USD pair<\/strong> is trading around <strong>0.6327<\/strong>, reflecting a <strong>mild decline of 0.09%<\/strong> as the pair remains under pressure. <strong>Key resistance is at 0.6329<\/strong>, with a breakout above this level potentially leading to a recovery toward <strong>0.6413<\/strong>, aligning with the <strong>38.2% Fibonacci retracement<\/strong>.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" src=\"https:\/\/www.vtmarkets.com\/en-ca\/wp-content\/uploads\/sites\/13\/2026\/03\/image-5-1024x446.jpg\" alt=\"\" class=\"wp-image-17207\" \/><\/figure>\n\n\n\n<p class=\"has-text-align-center\"><em>Picture: AUD\/USD dips to 0.6327 as bearish momentum builds, as seen on the <\/em><em><a href=\"https:\/\/vtmarketsapp.onelink.me\/CD7D\/240525WA\">VT Markets app<\/a><\/em><\/p>\n\n\n\n<p>On the downside, <strong>support is found at 0.6239<\/strong>, with a break below signalling a return to <strong>bearish momentum<\/strong>, possibly targeting <strong>0.6087<\/strong>. The <strong>MACD remains bearish, and the pair currently trades<\/strong> below its <strong>5-day moving average (0.63559)<\/strong>, reinforcing short-term downside risks.<\/p>\n\n\n\n<p>Fundamentally, <strong>traders are awaiting upcoming Australian inflation data<\/strong>, which could influence the <strong><a href=\"https:\/\/www.bloomberg.com\/news\/newsletters\/2025-02-20\/rba-interest-rate-cuts-banking-shares-australia-briefing\" title=\"\">Reserve Bank of Australia&#8217;s (RBA) monetary policy outlook<\/a><\/strong>. The market remains cautious, keeping <strong>AUD\/USD range-bound<\/strong>, with <strong>intraday bias neutral<\/strong> for now. If inflation surprises to the upside, it could bolster the Australian dollar, while weaker-than-expected data may drive further declines. Investors should closely watch <strong>economic indicators and cross-border developments<\/strong> for signals on the pair\u2019s next significant move.<\/p>\n\n\n\n<p>Traders are now watching for <strong>any updates from the RBA\u2019s next policy meeting<\/strong> and whether policymakers will acknowledge the need for faster rate cuts. Additionally, <strong><a href=\"https:\/\/www.reuters.com\/markets\/us\/fed-expected-respond-strongly-inflation-job-market-conditions-research-shows-2025-02-24\/\" title=\"\">US inflation data and Federal Reserve comments<\/a><\/strong> will influence broader <strong>USD strength<\/strong>, which remains a key factor for AUD\/USD movements.<\/p>\n\n\n\n<p>The <strong>Aussie dollar<\/strong> remains vulnerable in the near term, with <strong>$0.630<\/strong> serving as a critical support level. A break below this could see further declines toward <strong>$0.625<\/strong>, especially if US economic data outperforms expectations, strengthening the <strong>greenback<\/strong>. However, any surprise hawkish signals from the <strong>RBA<\/strong> could limit losses.<\/p>\n\n\n\n<p><strong><a href=\"https:\/\/www.vtmarkets.com\/trade-now\/\">Create your live VT Markets account<\/a><\/strong><strong> and <\/strong><strong><a href=\"https:\/\/myaccount.vtmarkets.com\/login\">start trading<\/a><\/strong><strong> now.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>AUD\/USD nears two-week lows as weak CPI and construction data fuel RBA rate-cut bets, while Trump\u2019s tariffs add pressure. &#8211; vtmarkets.com <\/p>\n","protected":false},"author":64,"featured_media":17000,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[31],"tags":[70],"class_list":["post-17206","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-analysis","tag-aussie"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/17206","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/64"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=17206"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/17206\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/17000"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=17206"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=17206"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=17206"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}