AUD/USD Retreats While Markets Await US Government Reopening Signal

Australian Dollar weakens as market focus shifts to US fiscal developments. The Australian Dollar faces renewed selling pressure on Wednesday, with the AUD/USD exchange rate slipping lower for the second consecutive day as the US Dollar flexes its muscles following positive signals on ending the government shutdown.

Why the AUD is losing ground

The Australian Dollar’s downward momentum stems from a combination of factors. On one hand, the RBA’s cautious monetary stance—reaffirmed this week by Deputy Governor Andrew Hauser—continues to support the currency on a fundamental level. However, the more immediate driver is the USD’s strength, which is being fueled by optimism surrounding the imminent resolution of the US government shutdown.

The political developments stateside are moving swiftly. The Senate has already passed the shutdown-ending bill, and it’s heading to the House for a vote on Wednesday before going to President Trump for signature. This means paychecks should resume soon, and crucial economic data releases will finally resume after a pause—something the market has been waiting for.

Technical levels to watch for AUD/USD traders

At the current level of 0.6520, the Australian Dollar against the US Dollar is sitting right near its nine-day Exponential Moving Average (EMA), suggesting the pair lacks clear directional conviction in the short term.

Downside risks: If buyers step aside, the pair could break below this nine-day EMA and test the psychologically important 0.6500 level. A failed bounce there would open the door to 0.6470 and ultimately the five-month low of 0.6414 recorded back in August.

Upside potential: On the flip side, a push above the 50-day EMA at 0.6536 would signal improving momentum and could target the rectangle’s upper band around 0.6630. If bulls maintain control, the pair could challenge the 13-month high of 0.6707 from September.

Market movers on the radar

The US Dollar Index (DXY) has halted a five-day losing streak and is hovering near 99.50. Traders should keep an eye on Federal Reserve speakers scheduled for later today—including Christopher Waller, Raphael Bostic, and Stephen Miran—as their remarks could move the needle on rate expectations.

On inflation, President Trump has signaled that the US could see inflation dip to 1.5% “pretty soon”—a level not seen since early 2021. Treasury Secretary Scott Bessent has also noted that inflation progress is being made, with prices expected to moderate in coming months. The CME FedWatch Tool currently prices in a 68% probability of a 25 basis point rate cut in December.

Why Australia matters to the AUD

Australia’s economic backdrop is showing signs of life. The Westpac Consumer Confidence index surged 12.8% in November to 103.8, marking the first time it’s climbed above 100 since February 2022. This strong rebound suggests Australian households are feeling more optimistic about economic conditions.

However, China remains crucial. China’s decision to temporarily lift export restrictions on dual-use materials (gallium, germanium, antimony, super-hard materials) is a modest positive, though the suspension runs only through November 2026. Since China is Australia’s largest trading partner, any shifts in Chinese economic data directly influence AUD sentiment. Recent Chinese CPI data came in slightly better than expected at 0.2% year-over-year, while PPI declined 2.1% YoY but beat forecasts.

Currency performance snapshot

Among major currencies today, the Australian Dollar shows mixed relative performance. It’s holding up better against the British Pound and Japanese Yen but weakening noticeably against the New Zealand Dollar, which is the strongest performer in the current session. This divergence highlights how regional factors and commodity prices are still playing a role in currency dynamics.

The path forward for 100 Australian Dollar to USD conversions hinges on whether the AUD can stabilize near support levels once US data and Fed rhetoric come back into full focus following the government reopening.