AUD/USD lost steam at the start of the final trading week of 2025, slipping back below the 0.6700 level as thin holiday liquidity slowed market activity and prompted traders to scale back risk.
The Australian dollar had enjoyed a short-lived bullish run late last week, but year-end volume dry-up left the pair struggling to sustain gains near key technical levels. With many global markets operating on reduced staffing and shortened sessions, price action has remained muted and prone to reversals.
Attention now turns to the final major data release of the year: the upcoming Meeting Minutes from the Federal Reserve. With little else on the economic calendar, traders are watching closely for any signals that could clarify the Fed’s policy outlook heading into 2026. Markets broadly expect a dovish tone as concerns around slowing growth and easing inflation persist.
Despite the near-term pullback, the broader outlook for AUD/USD remains shaped by diverging central bank paths. The Reserve Bank of Australia is widely seen moving toward a more aggressive rate-hike trajectory in early 2026, a factor that continues to support the Australian dollar over the medium term.
Until normal trading volumes return in the new year, analysts expect AUD/USD to remain range-bound, with limited conviction on either side and price movements driven more by liquidity conditions than fresh fundamentals.
