Australian Dollar Gains Momentum as US Dollar Slips on Fed Speculation

Highlights:

• AUD Gains: The Australian Dollar (AUD) strengthened against the US Dollar (USD) on September 8, 2025, supported by strong domestic trade surplus and GDP data.
• US Dollar Weakness: Softer-than-expected US jobs data intensified speculation of a Federal Reserve rate cut, putting pressure on the US Dollar.
• China’s Trade Support: China’s improved trade balance and stable exports provided additional backing for the Australian Dollar amid global market movements.

AUD Gains Ground Amid Strong Domestic Data

On Monday, September 8, 2025, the Australian Dollar (AUD) gained ground against the US Dollar (USD), buoyed by strong domestic economic data and weaker US indicators. At the time of writing, the AUD/USD is hovering near 0.6560, building on last week’s 0.5% increase. The Australian Dollar’s momentum comes after strong July trade surplus numbers and stronger-than-expected Q2 GDP growth, easing expectations of further Reserve Bank of Australia (RBA) rate cuts. Australia’s Trade Balance increased to AUD 7,310 million in July, up from AUD 5,366 million in June, surpassing forecasts of AUD 4,920 million. Meanwhile, Q2 GDP expanded by 0.6% quarter-over-quarter, exceeding predictions of 0.5%, while annual growth rose to 1.8% from 1.4% in Q1.

US Dollar Softens on Weaker Jobs Data

The US Dollar weakened following softer-than-expected US employment data, which intensified speculation of potential Federal Reserve (Fed) rate cuts.In August, Nonfarm Payrolls rose by only 22,000, falling short of the anticipated 75,000, while the unemployment rate edged higher to 4.3%.

China’s Trade Data Adds Support

China’s trade performance also bolstered the AUD, with the country’s trade balance rising to CNY 732.7 billion in August from CNY 705.18 billion in July. Exports and imports both showed moderate gains, reinforcing Australia’s outlook as a key trading partner.

Technical Outlook

From a technical perspective, AUD/USD continues to trade within a bullish ascending channel, staying above the nine-day Exponential Moving Average (EMA). The pair could target the seven-week high of 0.6588, followed by the channel’s upper boundary at 0.6610, with a potential break above pointing to the 10-month high of 0.6625.

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