USD to AUD Rate at 0.65 Again As Wages Disappoint in Australia

The bounce off the 0.65 level last week in AUD/USD was short-lived and this pair returned to it pretty quickly, which indicates a break below this level. The price was rejected by moving averages on the daily chart and since Friday this pair has lost 2 cents.

Since late September, the AUD/USD exchange rate has dropped nearly 4 cents, with sellers maintaining control as technical indicators and economic fundamentals both support the downtrend. Currently, the key support level for AUD sellers is 0.65, which the market quickly returned to after Thursday’s sharp rally on Chinese stimulus hopes—now fully erased.

AUD/USD Chart Daily – The Decline Has Been Steep

Given ongoing economic challenges in both China and Australia, there is little to drive a sustained rally, especially as China’s recent stimulus measures fell short of market expectations. Price action also points to a continued decline in the pair. Today, Australia’s Q3 Wage Price Index was also released, adding to the market’s focus on the pair’s downward trajectory.

Australian Q2 Wage Price Index

• Quarterly growth: +0.8% (vs. +0.9% expected), same as Q2 (+0.8%).
• Private and public sector wages both increased by +0.8% for the quarter, seasonally adjusted.
• Annual growth: +3.5% y/y for both private and public sectors (vs. +3.6% expected).
  • This is the lowest annual wage growth since Q4 2022.
  • Annual wage growth had previously been at or above 4% for four consecutive quarters.
• Previous annual rate was +4.1%.

The Q3 Wage Price Index data suggests a slowdown in wage growth in Australia, with quarterly and annual increases slightly below expectations. Both private and public sector wage growth have moderated, marking the lowest annual rise since late 2022. This deceleration could indicate easing inflationary pressures from wages, potentially reducing the need for aggressive rate hikes by the Reserve Bank of Australia. However, the steady increase in wages, despite being slower, still signals underlying resilience in the labor market.

AUD/USD Live Chart