The AUD\/USD pair experiences a sharp decline, trading near the 0.6500 mark during the European session. This drop follows the Reserve Bank of Australia (RBA) announcing a dovish outlook, reducing its Official Cash Rate by 25 basis points to 3.6%.<\/p>\n
The RBA’s decision aligns with expectations, though RBA Governor Michelle Bullock has hinted at further potential rate cuts. The Australian Dollar weakens amid this guidance, with speculation about the domestic labour market data due on Thursday.<\/p>\n
Expectations for the Australian economy’s job creation are set at 25,000 for July, compared to 2,000 in June, with unemployment expected to hold at 4.3%. Meanwhile, anticipation builds for the US Consumer Price Index (CPI) data, expected to measure a headline inflation increase of 2.8% for July.<\/p>\n
In the US, a 3.0% rise in core CPI, excluding volatile food and energy prices, is projected. These developments come as the RBA concludes one of its eight yearly meetings, where interest rate shifts often influence the Australian Dollar’s performance.<\/p>\n
We are seeing a clear split in central bank policy that creates an opportunity in the AUD\/USD pair. The Reserve Bank of Australia is now in a cutting cycle, which weakens the Australian dollar. The focus now shifts to whether the United States will maintain its own steady interest rate policy.<\/p>\n
The RBA’s move to 3.6% and the hint of more cuts to come is a strong bearish signal for the Aussie dollar. We believe this gives the RBA cover to act again if this Thursday’s labour data is weak, and a jobs number below the expected 25,000 could accelerate the currency’s decline. As of early August 2025, Australia’s wage price index has also shown signs of cooling, growing at an annual pace of 3.8% in the first quarter, giving the RBA more reason to ease policy.<\/p>\n
On the other side of the trade, this week\u2019s US inflation data is the main event. A core inflation figure coming in above the expected 3.0% would likely reinforce the Federal Reserve’s “higher for longer” stance, boosting the US dollar. Conversely, a softer reading could provide some temporary relief for the Australian dollar.<\/p>\n
Historically, the 0.6500 level has been a critical battleground for this pair. Looking back at late 2023, a decisive break below this mark saw the currency quickly fall toward the 0.6300 handle. We are watching for a similar pattern to emerge if the pair cannot reclaim 0.6500 in the coming days.<\/p>\n
Given the major data events scheduled, we are observing that options premiums have risen, reflecting expectations for higher volatility. Traders might consider buying put options to protect against or profit from a further slide in the AUD\/USD below the key 0.6500 support level. The elevated cost of these options suggests the market is already pricing in a significant move.<\/p>\n
For the weeks ahead, the path of least resistance for the AUD\/USD appears to be downward. We view any strength in the pair, perhaps following a weak US CPI report, as a potential opportunity to initiate new short positions. The underlying trend is driven by the RBA’s dovish policy, which is unlikely to change course soon.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" AUD\/USD drops near 0.6500 as RBA cuts rates; investors eye US inflation and Australia jobs data.<\/p>\n","protected":false},"author":62,"featured_media":16967,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-28853","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/28853","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\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=28853"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/28853\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/16967"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=28853"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=28853"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=28853"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}