**AUD/USD Price Outlook: Bears Eye 0.64 as US-China Tensions Weigh on Australian Dollar**
*Original article by Skerdian Meta, with additional analysis and data from FXStreet, Bloomberg, and Reuters.*
—
## Overview
The Australian dollar (AUD) has faced mounting pressure in recent weeks, falling sharply against the US dollar (USD). Geopolitical friction between the United States and China, persistent weakness in commodities, and diverging monetary policies have all converged to push AUD/USD lower. As risk appetite evaporates and investors seek safety in the greenback, analysts are now eyeing the 0.64 level as a key target for bears.
This comprehensive forecast explores the current dynamics of the AUD/USD pair, evaluates the macroeconomic drivers behind the move, and lays out potential technical levels for traders to watch.
—
## Current Market Context
As of mid-October 2025, AUD/USD trades near its lowest point in a year, hovering just above the 0.64 mark. The slide gathers momentum from a confluence of risk-off sentiment and economic headwinds arising from Australia’s tight linkages with China. Here are some of the critical issues affecting the pair:
### 1. Escalating US-China Tensions
The already fraught relationship between Washington and Beijing has grown tenser, impacting global markets and currencies such as the Australian dollar. Australia’s economy is particularly sensitive to these developments due to its heavy reliance on Chinese trade.
– **Recent Events**:
– New trade restrictions and technology bans have been imposed by the US.
– Beijing has responded with rhetorical and regulatory threats, increasing market volatility.
– Diplomatic meetings between the two superpowers have yielded little progress, intensifying uncertainty for export-driven economies like Australia.
– **Investor Reaction**:
– Risk-averse traders have flocked to safe havens, including the US dollar and US Treasuries.
– Risk-correlated currencies, especially the AUD, have sold off substantially.
– Equity markets in Asia and Australia have also retreated, compounding negative currency momentum.
### 2. Weakness in Commodity Markets
Australia is a leading exporter of iron ore, coal, and other raw materials. These commodities serve as bellwethers for the health of the global economy. Any significant slowdown in Chinese demand exerts direct pressure on Australia’s terms of trade and the Aussie dollar’s value.
– **Key Developments**:
– Iron ore prices have dipped as China curtails property and infrastructure investment, reducing steel production.
– Coal prices trended lower in Q3 and Q4 2025 amid excess inventory and shifting global energy demand.
– The Reserve Bank of Australia (RBA) has acknowledged that falling commodity revenues could weigh on wage growth and national income.
### 3. Divergent Monetary Policy
The policy stances of the Federal Reserve and the Reserve Bank of Australia have begun to diverge more distinctly, further influencing AUD
Read more on AUD/USD trading.