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Australian Dollar remains subdued as US Dollar corrects upwards – Crypto News

Published

9 months ago

October 21, 2025

Dripp

The Australian Dollar (AUD) declines against the US Dollar (USD) on Tuesday, losing its daily gains. However, the AUD/USD pair appreciated as the AUD received support from improved market sentiment amid progress on a United States (US)-Australia trade agreement.

US President Donald Trump and Australian Prime Minister Anthony Albanese signed an USD 8.5 billion critical minerals agreement at the White House on Monday, aimed at securing access to Australia’s abundant rare-earth resources amid China’s tighter export controls.

The US and Australia committed to investing at least USD 1 billion each over the next six months in mining and processing projects, while also agreeing to establish a price floor for critical minerals. Trump noted that the agreement had been “negotiated over several months,” while Albanese described it as taking US–Australia relations “to the next level.”

President Trump also said he expects to reach a “fair deal” with China’s President Xi Jinping during their upcoming meeting in South Korea, signaling a possible easing of trade tensions. However, US Trade Representative Jamieson Greer adopted a tougher stance, accusing Beijing of engaging in a “broader pattern of economic coercion” targeting companies making strategic investments in critical US industries. Any shift in China’s economic conditions could also affect the Australian dollar (AUD), given the close trade ties between China and Australia.

US Dollar advances despite risk aversion

The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against six major currencies, is gaining ground after recovering intraday losses and and trading around 98.70 at the time of writing. However, the Greenback struggled amid the ongoing US government shutdown continues to weigh on the broader economic outlook.
The US federal government shutdown has entered its third week, with no clear end in sight amid a partisan fight in the Senate over federal funding priorities. The shutdown is now the third-longest funding lapse in modern history.
St. Louis Fed President Alberto Musalem spoke at the Institute of International Finance Annual Membership Meeting in Washington, DC, on Friday that he could support a path with another rate cut if more risks to jobs emerge and inflation is contained. Musalem added that the Fed should not be on a preset course and follow a balanced approach.
US Federal Reserve (Fed) Governor Christopher Waller stated on Thursday that he supports another interest rate cut at this month’s upcoming policy meeting. Meanwhile, the Fed’s newest governor, Stephen Miran, reiterated his call for a more aggressive rate-cut trajectory for 2025 than that favored by his colleagues.
Federal Reserve Chair Jerome Powell stated last week that the central bank is on track to deliver another quarter-point interest-rate reduction later this month, even as a government shutdown significantly reduces its read on the economy. Powell highlighted the low pace of hiring and noted that it may weaken further.
The CME FedWatch Tool indicates that markets are now pricing in nearly a 99% chance of a Fed rate cut in October and a 99% possibility of another reduction in December.
The People’s Bank of China (PBOC) decided on Monday to keep its its one- and five-year Loan Prime Rates (LPRs) unchanged at 3.00% and 3.50%, respectively.
China’s Gross Domestic Product (GDP) grew 4.8% year-over-year (YoY) in the third quarter (Q3) of 2025, as expected following a 5.2% growth in the second quarter. Meanwhile, the economy expanded 1.1% quarter-over-quarter (QoQ), surpassing the market consensus of 0.8% print.
China’s annual June Retail Sales increased by 3.0% in September, against 2.9% expected and 3.4% prior, while Industrial Production came in at 6.5% vs. 5.0% estimate and August’s 5.2%.
The Reserve Bank of Australia (RBA) is expected to deliver a rate cut in November, driven by a surprise uptick in the Unemployment Rate, which rose to 4.5% in September, jumping to a near four-year high. The figure came in above the market consensus and the previous 4.3%.

Australian Dollar struggles to break above nine-day EMA amid bearish bias

AUD/USD is trading around 0.6510 on Tuesday. Technical analysis of a daily chart suggests a persistent bearish bias, with the pair trading within a descending channel. The 14-day RSI remains below 50, strengthening the bearish outlook.

On the downside, the AUD/USD pair may navigate the area around the lower boundary of the descending channel, aligned with the four-month low of 0.6414, recorded on August 21. Further declines below this confluence support zone would strengthen the bearish bias and prompt the pair to test the five-month low of 0.6372.

The AUD/USD pair is testing the immediate barrier at the nine-day Exponential Moving Average (EMA) of 0.6517, followed by the 50-day EMA at 0.6546 and the descending channel’s upper boundary around 0.6570.

AUD/USD: Daily Chart

Australian Dollar Price Today

The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the weakest against the US Dollar.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		0.14%	0.20%	0.50%	0.15%	0.32%	0.42%	0.05%
EUR	-0.14%		0.05%	0.35%	0.00%	0.18%	0.27%	-0.10%
GBP	-0.20%	-0.05%		0.28%	-0.05%	0.13%	0.22%	-0.15%
JPY	-0.50%	-0.35%	-0.28%		-0.35%	-0.17%	-0.08%	-0.44%
CAD	-0.15%	-0.00%	0.05%	0.35%		0.17%	0.26%	-0.10%
AUD	-0.32%	-0.18%	-0.13%	0.17%	-0.17%		0.09%	-0.29%
NZD	-0.42%	-0.27%	-0.22%	0.08%	-0.26%	-0.09%		-0.37%
CHF	-0.05%	0.10%	0.15%	0.44%	0.10%	0.29%	0.37%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).

Australian Dollar FAQs

One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD.

The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive.

China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs.

Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD.

The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.