The Australian Dollar (AUD) declined by 0.26% against the US Dollar (USD), with the AUD/USD pair trading at 0.6928 as the USD extended its gains for the fourth consecutive day. This movement comes despite a reduction in Fed-hawkish bets, as Federal Reserve policymakers, including Vice Chairman Philip Jefferson, emphasized patience ahead of the October 28 meeting, noting the US economy is near maximum employment. However, Minneapolis Fed President Neel Kashkari advocated for further rate hikes, highlighting a divergence in policy outlooks [1].
Key US economic data released on Thursday included the ISM Manufacturing PMI, which was little changed at 54.5, down from 54.6 and below forecasts. The report showed improvements in New Orders, continued expansion in the Employment Index, and a sharp increase in Prices Paid from 71.1 to 77.9, reflecting high energy prices. Jobless claims for the week ending September 26 were 197K, below estimates and the previous week's revised figure of 198K. The Q2 2026 GDP final reading was 2.2% QoQ, up from 1.5%, indicating stronger-than-expected economic performance and a labor market consistent with 'maximum employment' [1].
Despite resilient US data, expectations for a Fed rate hike in October have fallen to 30%, while the odds for a hold remain solid at 70%, according to Prime Terminal. In Australia, there were no major economic releases, but upcoming Flash PMIs and the TD-MI Inflation Gauge next week are expected to provide further insight into the economy. US traders are also awaiting Friday’s Nonfarm Payrolls report for September, which is forecast to decrease from 162K to 90K, with the Unemployment Rate expected to remain at 4.1% [1].
From a technical perspective, the AUD/USD daily chart shows the pair trading at 0.6929, maintaining a bearish near-term bias as it remains below the triple simple moving average (SMA) at 0.7091. Downside pressure is reinforced by a broader descending resistance line from 0.8015, while the Relative Strength Index (14) at 25.55 indicates oversold conditions, suggesting that although sellers are in control, the pace of decline may moderate rather than accelerate further. Initial resistance is seen at the triple SMA area around 0.7091, with a stronger barrier at 0.7198 [1].
CONCLUSION
The Australian Dollar's decline against the US Dollar reflects the latter's strength amid resilient US economic data and shifting Fed rate expectations. While technical indicators suggest continued downside, oversold conditions may slow the pace of further losses. Upcoming economic releases in both countries could influence future market direction.