See today’s full USD/JPY forecast with chart setups and trade ideas.
AUD/USD: Aussie Building Activity in Focus
Meanwhile, Australian building activity could give insights into the real estate market and house price trends, influencing RBA rate cut bets and the AUD/USD pair.
Building approvals and commencement numbers indicate the pipeline of new housing supply. A jump in approvals may increase supply, potentially cooling house price growth. On the other hand, falling approvals could constrain supply, driving prices higher.
Housing supply trends can reflect economic sentiment. Supply trends may also influence rental prices and the RBA rate path. Lower supply may lead to reduced vacancy rates, fueling housing services inflation, which represents around 23% of the Consumer Price Index (CPI). Conversely, increased supply could ease rental price pressures, potentially cooling housing services inflation. The total number of dwellings commenced fell 4.4% in Q4 2025.
RBA Governor Michele Bullock remarked on the housing sector during the July press conference, stating:
“Higher building costs and durable goods in the monthly CPI numbers were higher than the RBA thought, contributing to the rate cut delay.”
AMP Head of Investment Strategy and Chief Economist Shane Oliver commented on consumer home price growth expectations and the demand outlook:
“While there was a slight dip in July on the RBA decision to hold, consumers’ home price growth expectations remain high and perceptions as to whether now is a good time to buy a dwelling remain up from recent lows, albeit they are still historically weak.”
AUD/USD: Key Scenarios to Watch
- Bearish AUD/USD Scenario: Cooler building activity, rising US-China trade tensions, or Beijing’s silence on stimulus. These factors may push AUD/USD toward the $0.65 support level.
- Bullish AUD/USD Scenario: Easing US-China trade friction, increased building activity, or more policy stimulus from Beijing could send AUD/USD toward the $0.66 level.
Click here for a more comprehensive analysis of AUD/USD trends and trade data insights.
AUD/USD Daily Outlook: Producer Prices to Drive Rate Differentials
Later today, US producer prices would likely influence US-Australian interest rate differentials and AUD/USD trends.
A larger-than-expected rise in producer prices may temper Fed rate cut bets, widening the rate differential in favor of the US dollar. A wider rate differential could push AUD/USD toward $0.65, exposing the 50-day EMA.
Conversely, lower-than-expected producer prices could narrow the rate differential, favoring the Aussie dollar. Rising bets on a September Fed rate cut may push the pair toward $0.66.
On July 15, the US CPI Report revealed sticky core inflation and rising headline inflation, tempering Fed rate cut expectations. AUD/USD briefly climbed to a high of $0.65758 before sliding to a session low of $0.65074 in reaction to the inflation data. The price action underscored sensitivity to US inflation data and Fed rate cut bets.
