AUD to USD Forecast: Is it a good time to buy USD from Australian Dollars?

USDAUD Forecast highlights:

• USD weakened substantially against AUD during Trump 2.0 (tariffs and macro related)
• A failed upside breakout at 1.630 and a month-long slide suggest concerns about USD
• Pricing below 1.55 conducive to buy more US$; near-term downside target at 1.500

How has USDAUD performed recently?

It was a rather volatile five months for AUD-USD exchange rate. The inauguration of president Donald Trump heralded a drastic change in America’s macro development.

Initially, optimism filled the air. Then, tariffs struck. USDAUD burst above the long-term resistance at 1.635 (USD stronger) before investors realised that these tariffs are here to stay. US government is hiking its import tariff rates to the highest level in decades.

This, investors reasoned, surely can’t be good for America’s economy. Quickly, USD’s strength drained away. The rally above at 1.650 retreated in a matter of days; the rate was dragged below 1.600 and more.

For the last few weeks, USD has come under increased selling pressure as tariff negotiations prolonged. Under intense political pressure, the US president had to announce a 90-day delay in implementing higher tariff rates. But this merely delayed, not solved, the tariff problem. USDAUD even dipped below 1.55 – the lowest level in eight months – a few times.

The technical picture here is clear: Unless traders see a major macro catalyst that would overturn USD weakness, the rate will, invariably, slide lower. The next area of support is noted at the round number level at 1.500.

Is it a good time to buy US dollars with AUD? 

The US dollar has depreciated in recent weeks. At the start of the year, AUD was trading above 1.60 to a dollar. Now it is around 1.540.

If you need some USDs in the near term, current levels may not be a bad time to exchange some AUD for USDs. A rate below 1.55 is pretty good these days (eight-month highs).

On the other hand, you may speculate that USD’s weakness will prolong. That is, prices may drop all the way to 1.500.

The risk in waiting is that the Trump administration may, out of the blue, inject some USD-positive news. When this happens, a sharp revaluation to 1.600 is possible. You weigh the risk.

Will USD get stronger in the second half of 2025?

The key question is whether the Dollar will rebound later this year.

Dollar suffered in the first five months of 2025 due to:

• an unwinding of overbought technicals (Dollar had been rising for 3 months prior to its peak in January)
• Trump’s global tariffs and
• Weakening economic indicators (eg, ADP Labour figures for May came in significantly below expectations)

However, contrarian traders will ask: Is USD oversold? Are current positions on the dollar generally one-sided?

Look at the US dollar Index below. From 110.0 in January, the index has lost 10 percent of its value to trade below the 100.0 mark, which is an important round number level.

This horizontal floor had acted as support several times in the past and the bears are struggling to break this support decisively. Will a rebound happen from here? Possibly. Current macro currents are highly volatile and it would not take much to spark a rush to close short-dollar positions.

Chartwise, a break below 98.0 would be near-term bearish though, since that affirms the six-month long downtrend into new multi-year lows.

What is the USDAUD forecast in weeks?

Most brokers are taking a ‘bullish-bearish’ stance on USDAUD. They expect the rate to rebound in the medium term (bullish); before anticipating a drop next year (bearish). Hence, the curve rolls up and down.

But if we look at the price movements of USDAUD, the trend is now steadfastly downward sloping. The market is perhaps more bearish at the moment than these price forecasts.

As spot rates can move quickly and render these predictions out of date quickly, we would not place a lot of emphasis on predictions now. The market contains many factors that are unpredictable.

Source: ExchangeRates.org.uk (June 25)