**AUD/USD Extended Forecast: Analysis and Prospects for October 2025**
*Based on analysis and reporting by Matt Weller, FOREX.com (Original Article: “AUD/USD Forecast: Forex Friday October 31, 2025”)*
The AUD/USD currency pair serves as one of the primary barometers of both Australian and United States economic performance and monetary policy trajectory. As we move towards the end of October 2025, the pair remains highly sensitive to macroeconomic shifts, central bank policies, and evolving global sentiment. This comprehensive analysis draws from the latest available forecasts, macroeconomic data, and expert consensus, building on the original insights by Matt Weller and supplementing them with broader market research.
## Recent Performance Overview
– **Volatility and Range:** Through most of October 2025, AUD/USD has experienced moderate volatility, oscillating within a well-defined range as traders digest both domestic and international developments. The pair has attempted multiple rallies toward resistance, only to encounter selling pressure near the upper bounds of its recent range.
– **Key Levels Observed:**
– **Support:** 0.6400–0.6450
– **Resistance:** 0.6550–0.6600
– The price consolidated, alternating between bouts of risk-on optimism and renewed caution following interest rate decisions from both the Reserve Bank of Australia (RBA) and the US Federal Reserve.
## Macroeconomic Landscape
### Australian Economic Developments
– **Monetary Policy:** The RBA has maintained a cautious yet dovish tone throughout Q3 and Q4 2025, as inflation readings hover close to the bank’s 2-3% target range. Although the possibility of a rate hike was discussed earlier in the year, recent data has not justified further tightening.
– **Inflation and Growth:** Core inflation in Australia has decelerated, coming in at 2.4% in the latest quarter. Labor market data remain robust, with unemployment steady at 4%. However, sluggish wage growth and the drag from China’s slower recovery continue to weigh on consumer demand.
– **Trade Balance:** Australia’s major export partners, chiefly China and Southeast Asia, have shown mixed recovery signals. Commodity prices, especially for iron ore and coal, have stabilized but remain well below their 2022 peaks.
### US Economic Context
– **Federal Reserve Policy:** The US Federal Reserve held rates steady at its October 2025 meeting, citing a balanced risk outlook. Fed Chair communications underscore a reluctance to cut rates amidst resilience in US jobs and consumption figures.
– **Interest Rate Differential:** The yield spread between US and Australian bonds continues to favor the US dollar, keeping upward pressure on AUD/USD muted.
– **Risk Appetite Drivers:** The US economy, while slowing from 2024’s highs, avoided recession. However, sticky inflation (with CPI at 2.7%) has limited Fed policy flexibility.
### Global Factors Affecting AUD/USD
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