Insights 
VT 
The Australian Dollar is trading at new July lows, around 0.6450 against the US Dollar. This follows strong demand for the USD driven by positive US macroeconomic data and anticipation of the Federal Reserve’s monetary policy announcement.
Australian Inflation Data
Australia’s Consumer Price Index rose by 0.7% in the second quarter of 2025, down from the previous quarter’s 0.9% and below the expected 0.8%. The Reserve Bank of Australia’s Trimmed Mean CPI rose by 0.6% quarterly and 2.7% annually, slightly missing expectations.
June’s annual CPI increased by 1.9%, a decrease from May’s 2.1%. The AUD/USD pair has dropped below the 0.6500 level following this news.
The US reported an addition of 104,000 new jobs in July, surpassing the expected 78,000. The country’s GDP rose by 3% in the second quarter, exceeding the anticipated 2.4%.
Market speculation surrounds the Federal Reserve’s upcoming rate decision, with the central bank expected to maintain current interest rates. US President Donald Trump has called for a rate cut, given the country’s economic performance.
The AUD/USD pair experienced sustained declines, remaining below key support levels. Short-term support is noted at 0.6437, with resistance around 0.6470.
Market Analysis
We are seeing the Australian Dollar fall because local inflation is not as high as people expected. This makes it less likely for the Reserve Bank of Australia to raise interest rates, which weakens the currency. This situation is the complete opposite of what is happening in the strong United States economy.
Given this divide, we believe derivative traders should look at buying put options on the AUD/USD pair. This strategy becomes profitable if the currency continues to drop below its current price. It is a way to bet on the Aussie dollar’s decline while knowing your maximum possible loss upfront.
Our bearish view is strengthened by recent statistics from China, Australia’s biggest customer, which showed slowing factory output in June 2025. This usually means less demand for the raw materials Australia sells, putting more downward pressure on its dollar. We also saw reports last week that Australian consumer confidence just hit a new six-month low.
On the other hand, the US economy looks very healthy, with recent numbers showing the economy grew by 3% and added 104,000 jobs in July. We also heard from Federal Reserve officials just last week who signaled they are in no rush to cut interest rates. This underlying strength should keep the US Dollar in high demand.
This pattern reminds us of what happened back in 2018 and 2019, when the US was raising rates while Australia was not. That policy difference caused the AUD/USD to fall by more than 10% over that time. History shows that when the two economies move in opposite directions like this, the trend can last for a while.
We are watching the 0.6437 price level very carefully, as a drop below this could lead to a quicker fall toward the 0.6350 area. Any bounce back toward the 0.6470 level could be seen as an opportunity to place bearish bets. The upcoming Federal Reserve announcement will be the next big event to move the market.
