Insights 
VT 
The Australian Dollar is largely unchanged against the US Dollar, trading around 0.6511. This follows mixed data from the US, which included the Consumer Price Index and S&P Global PMI reports. Initially, a softer-than-expected inflation report put pressure on the US Dollar, boosting the Australian Dollar.
US Economic Data
However, resilient business activity data allowed the US Dollar to recover. The US Dollar Index is around 99.00 and has gained roughly 0.4% over the week. The US CPI rose 0.3% month-on-month, missing the forecast of 0.4%, and increased 3.0% year-on-year. Core CPI figures were also below expectations.
S&P Global Flash Composite PMI rose to 54.8 in October, with service and manufacturing indices also increasing. Nonetheless, the University of Michigan survey reflected weak household confidence. The AUD/USD is trading within 0.6480–0.6520, with indicators showing a slight bearish trend.
The Reserve Bank of Australia’s Trimmed Mean CPI has a quarterly release frequency and is essential for understanding inflation trends. This inflation measure, now at 2.7%, influences the RBA’s interest rate decisions. The next release is due on 29 October 2025.
As of October 24, 2025, we are seeing the AUD/USD pair locked in a tight range around 0.6511, reflecting major indecision. The market is weighing conflicting signals from the United States, with softer inflation data suggesting economic weakness while strong business activity points to resilience. This stalemate presents an opportunity for traders who understand how to trade volatility ahead of key events.
Fed and RBA Outlook
The US Federal Reserve’s path appears set for further easing, especially after the rate cut we saw back in September 2025. Data has confirmed a slowdown, with recent figures showing that US Q3 GDP growth came in at an annualized 1.8%, missing expectations and reinforcing the case for another rate cut. Markets are therefore fully pricing in a 25-basis-point reduction at the upcoming meeting on October 30.
On the other side of the pair, the Australian inflation data due on October 29 is the next major catalyst. The previous quarter’s Trimmed Mean CPI was 2.7%, and the market consensus is for this new reading to come in at 2.6%. Since this would keep inflation near the top of the Reserve Bank of Australia’s 2-3% target range, it likely means the RBA will remain on hold, creating a policy divergence with the Fed.
For derivative traders, this sets up a classic volatility play heading into next week. The back-to-back releases of Australian CPI and the Fed’s rate decision will almost certainly cause a significant price swing. We saw similar conditions in late 2023, where conflicting data releases caused implied volatility on major pairs to spike over 15% in a single week.
Given the uncertainty in direction, a long straddle option strategy could be effective, involving the purchase of both a call and a put option at the same strike price. This strategy profits from a large price move in either direction, which is a high probability given the scheduled events. The main risk is if both economic releases are duds and the pair remains stagnant, causing the options to lose value.
For those with a bearish bias, based on the recent Head-and-Shoulders pattern breakdown, buying put options is a straightforward approach. A strike price below the key support level of 0.6480 would allow a trader to profit from a potential downward move toward 0.6415. This provides a defined-risk way to position for a stronger US dollar or a surprisingly weak Australian inflation report.
