Yesterday, the AUDUSD currency pair continued its pullback from last week's top just above the level of 0.634. The Australian dollar has not yet joined the massive strengthening trend against the US currency, but the situation may change in the near future. When traders' interest in the euro and the yen will slightly subside, they will start looking for currencies which growth relative to the US dollar has not yet been realized. At this point, the Australian currency may experience a surge in demand, and AUDUSD quotes will return to the level of 0.634.
Weakening of the US dollar continues to be triggered by fears of recession caused by the tariff policy of the US government. As Chris Weston of Pepperstone argues, the US usually benefits from high volatility in the market. However, now the appeal of the dollar decreases, as the economy and the stock market of the country cause a lot of anxiety, the expert notes.
Against this background, the largest Wall Street banks worsened their forecasts for US GDP growth. Thus, experts of Morgan Stanley revised their assessment of the increase in the size of the U.S. economy for 2025 from 1.9% to 1.5%, and for 2026 from 1.3% to 1.2%. Analysts at Goldman Sachs revised GDP growth expectations even more sharply, from 2.4% to 1.7% for the current year. According to Polymarket, the possibility of recession in the US by the end of the year is already 40%, while in February it did not exceed 25%.
Meanwhile, the Australian population reacted positively to the first key rate cut by the country's central bank last month. Westpac Consumer Confidence Index jumped 4 points to 95.9, the highest level in 3 years. In this regard, the regulator may pause and not ease monetary policy further in April. This will strengthen the appeal of the Australian dollar.
At Tuesday's trading session, the bulls attempts to turn AUDUSD quotes upwards are noticeable. If today's day closes with growth, the target of 0.634 may be reached before the end of the week.
Consider the following trading strategy:
Buy AUDUSD at the current price. Take profit – 0.634. Stop loss – 0.62.
This content is for informational purposes only and is not intended to be investing advice.
