If your AUD/USD charts show approximately 0.6630, the pricing might be incorrect. Retail FX charts often rely on the bid price, which can display around 0.6630 due to low interest. Meanwhile, the wholesale FX market’s trading price is closer to Friday’s level at about 0.6645. On Monday mornings, market liquidity is usually thin until more Asian markets open, which can cause price fluctuations. It’s wise to exercise caution during this time.

Monday Morning Market Dynamics

The thin liquidity on this Monday morning, with the wholesale AUD/USD price around 0.6645, serves as a warning. These conditions can lead to sudden and unpredictable price swings before London and New York markets start trading. For derivative traders, it’s smart to set wider stops on early-week positions to avoid being affected by market noise. Looking forward, we remember that the Reserve Bank of Australia kept rates steady at its August 2025 meeting because of concerns over high inflation of 3.8% in Q2 2025. This cautious approach is giving some support to the Aussie dollar, but market participants are questioning how long it will hold. Any options strategies should consider possible changes in RBA guidance in their next statement. On the other hand, last week’s US CPI data for August 2025 was slightly higher than expected, which reinforces the Federal Reserve’s ‘higher for longer’ stance. This strengthens the US dollar and could limit major AUD/USD rallies. We see this reflected in interest rate futures, which recently ruled out any chance of a Fed rate cut before the end of 2025.

Commodity Markets Impact

We must also pay attention to commodity markets, as they significantly impact the Australian economy. Iron ore prices, a major export, have dipped below the crucial $100 per tonne level due to ongoing concerns about industrial demand from China. This external pressure poses a significant challenge for the Aussie dollar and supports a bearish outlook. Given these mixed factors, we expect the AUD/USD to stay mostly range-bound but with a downward tendency in the coming weeks. Selling out-of-the-money call options or setting up bear call spreads could be effective ways to earn premium while managing risk against any sudden upside? These strategies would benefit from sideways movement and a gradual decline towards the 0.6500 level, a critical support area tested back in May 2025. Create your live VT Markets account and start trading now.

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