It’s all one trade at the moment.
AUD/USD is unwinding the post-Fed gains, just like stocks. Asia tried to push the moves further but soon ran out of gas. That led to profit taking and was helped along by the usual AI-overspend theme as Oracle shares were wrecked after earnings.
The Australian dollar is particularly soft because of the big miss in today’s jobs report. The economy lost 21.3K jobs compared to the +20K reading expected.
The good news for AUD is that the Fed boosted its GDP forecast for 2026 to 2.3% from 1.8% via the median range of Fed members. That’s a great sign for global growth and Australian commodity exports. The bad news is that Chinese stocks have been struggling lately and there isn’t the same kind of optimism about an improving growth trajectory in Australia.
Overall, I think we have to wait for something more significant than the Fed to jolt the market but we might have to wait for 2026 to see it.
This article was written by Adam Button at investinglive.com.
