Why AUD/USD Is Holding Strong Near September Highs—What Traders Should Watch

The pair sits comfortably above 0.6640, marking its highest level in nearly three months. For traders converting 98 USD to AUD at current levels, the exchange rate remains particularly favorable, reflecting the structural support underpinning the Australian Dollar.

The Policy Divergence Keeping AUD/USD Bid

The core driver remains straightforward: the Reserve Bank of Australia and the US Federal Reserve are on completely different paths. While the RBA is preparing to potentially raise rates in 2025—supported by robust economic growth and a tight labor market—the Fed is practically certain to cut by 25 basis points this Wednesday, with the CME Group’s FedWatch Tool showing a nearly 90% probability.

RBA Governor Michele Bullock recently reinforced that inflation remains above the bank’s comfort zone, failing to sit sustainably within the 2-3% annual target. Australia’s economy expanded at its fastest pace in two years, creating an unusual scenario where rate hikes become more plausible while global central banks ease policy. This divergence acts as a natural bid for the Australian Dollar, as investors rotate into assets backed by higher real yields.

What’s Moving the Needle This Week

Two events matter for spot traders:

China’s Trade Balance data arrives Monday, December 8 at 03:00 UTC. As the previous reading came in at 640.4B CNY, any surprise could inject volatility. Since China’s economic health ripples through commodity prices—particularly iron ore and coal—Australian exporters and the currency are sensitive to this release.

The Fed announcement and Jerome Powell’s press conference on Wednesday will likely cement expectations around the terminal rate for 2025. Market participants are essentially on pause, waiting for guidance rather than making fresh directional bets, which explains the muted consolidation around 0.6640.

The Technical Setup Favors Buyers

The pair has found a comfort zone near its highest point since mid-September. Rather than breaking decisively higher, AUD/USD is grinding sideways—a classic accumulation pattern. Any pullback from here is likely to find support, as the fundamental backdrop remains firmly tilted toward Australian Dollar strength. Traders converting larger amounts like 98 USD to AUD should monitor whether spot holds above 0.6630-0.6640 as the week unfolds.

Bottom line: The setup remains constructive for AUD bulls until proven otherwise. Central bank divergence, solid Australian growth, and China trade data provide the script for the next leg higher.