Bank of AmericaLong AUD/USD
Last updated: 28 Sept 2025
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Bank of America has closed its long position in AUD/USD after the trade hit the stop-loss level at 0.6570, according to a report released on Thursday.
The trade was initiated on July 10, 2025, with an entry level of 0.6546 and an initial target of 0.6900. Previously, Bank of America had raised the stop-loss from 0.6350 to 0.6570 in mid-September, following an upward move in the currency pair.
Despite the closure of this position, Bank of America maintains a medium-term bullish outlook on AUD/USD. The bank cites expectations that the Federal Reserve will place greater emphasis on employment rather than inflation, alongside a projected decline in FX hedging costs. Additionally, the bank anticipates that upcoming developments in China will provide further support for the Australian dollar, including the Fourth Plenum meeting on October 15 and U.S.China talks at APEC scheduled for October 31 November 1.
In the near term, the outlook appears more balanced due to the recent strength in U.S. economic data, which has broadly strengthened the U.S. dollar. Meanwhile, Federal Reserve officials have adopted a cautious tone regarding the pace of interest rate cuts. This has led to a rise in U.S. bond yields and reduced expectations for imminent Fed rate cuts.
Bank of America also flagged potential downside risks for the Australian dollar heading into next weeks Reserve Bank of Australia (RBA) meeting. Governor Bullock could potentially trigger selling pressure on AUD/USD by adopting a more dovish tone, possibly highlighting the recent slowdown in employment growth or downplaying the significance of monthly CPI data.
The trade was initiated on July 10, 2025, with an entry level of 0.6546 and an initial target of 0.6900. Previously, Bank of America had raised the stop-loss from 0.6350 to 0.6570 in mid-September, following an upward move in the currency pair.
Despite the closure of this position, Bank of America maintains a medium-term bullish outlook on AUD/USD. The bank cites expectations that the Federal Reserve will place greater emphasis on employment rather than inflation, alongside a projected decline in FX hedging costs. Additionally, the bank anticipates that upcoming developments in China will provide further support for the Australian dollar, including the Fourth Plenum meeting on October 15 and U.S.China talks at APEC scheduled for October 31 November 1.
In the near term, the outlook appears more balanced due to the recent strength in U.S. economic data, which has broadly strengthened the U.S. dollar. Meanwhile, Federal Reserve officials have adopted a cautious tone regarding the pace of interest rate cuts. This has led to a rise in U.S. bond yields and reduced expectations for imminent Fed rate cuts.
Bank of America also flagged potential downside risks for the Australian dollar heading into next weeks Reserve Bank of Australia (RBA) meeting. Governor Bullock could potentially trigger selling pressure on AUD/USD by adopting a more dovish tone, possibly highlighting the recent slowdown in employment growth or downplaying the significance of monthly CPI data.
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