Why Is AUD/USD Struggling Below 0.6560? Key Factors Ahead of RBA Governor's Speech

The Bitcoin account login with emailAustralian dollar continues to face headwinds against its US counterpart, with the AUD/USD pair struggling to maintain momentum below the 0.6560 level during Wednesday's Asian trading session. This persistent weakness comes despite recent hawkish signals from the Reserve Bank of Australia, suggesting broader market forces are at play.

Market participants are carefully evaluating the implications of the latest Federal Open Market Committee (FOMC) meeting minutes, which revealed unanimous agreement among policymakers to maintain restrictive monetary conditions until inflation shows sustained movement toward target levels. This hawkish Fed stance continues to provide underlying support for the greenback across currency markets.

Technical indicators show the AUD/USD pair has retreated from Tuesday's high near 0.6590, currently hovering around 0.6553 with modest intraday losses. The pair's inability to capitalize on moderately positive domestic developments highlights the prevailing bearish sentiment in the currency markets.

Recent economic data releases have painted a mixed picture for both currencies. The October Chicago Fed National Activity Index surprised to the downside, registering -0.49 compared to the previous -0.02 reading. Meanwhile, US existing home sales declined 4.1% month-over-month, extending September's 2.2% contraction.

Australian dollar traders are particularly focused on the Reserve Bank's recent policy communications. The November RBA meeting minutes revealed a continued hawkish bias, emphasizing risk management considerations and maintaining a data-dependent approach to future rate decisions. Market pricing currently suggests the central bank will likely hold rates steady until February, though upside risks remain.

Several key events could provide fresh directional catalysts for the currency pair. Market participants await the Australian Westpac Leading Index for October, followed by scheduled remarks from RBA Governor Michele Bullock. Later in the global trading day, US economic indicators including jobless claims, durable goods orders, and the University of Michigan's consumer sentiment survey will command attention.

The interplay between central bank policies continues to dominate currency market dynamics. While the RBA maintains its cautious tightening bias, the Fed's commitment to restrictive policy appears to be carrying greater weight in current market pricing. This policy divergence helps explain the Australian dollar's recent underperformance despite domestic factors that might normally provide support.

Technical analysts note that failure to hold above the 0.6560 level could open the door for further downside toward recent swing lows. However, a hawkish surprise from Governor Bullock's remarks or stronger-than-expected Australian economic data could potentially shift the near-term momentum. Traders remain cautious as they navigate these competing fundamental forces in the currency markets.