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Date: 17th February 2025.


The AUD Surges as Foreign Buyer Ban Hits & Rate Cuts Nears!


In 2025 the Australian Dollar has been one of the best-performing currencies increasing by 2.85% so far. Analysts expect the AUD to be one of the most volatile currencies of the week due to policy changes. The Reserve Bank of Australia is due to cut its interest rates by 0.25% and has announced a ban on foreigners purchasing homes for 2 years. What does this mean for the Australian Dollar?


RBA To Cuts Rate For First Time Since 2025


Analysts expect the Reserve Bank of Australia to cut interest rates from 4.35% to 4.10% tomorrow morning. This would mark the first time that the RBA has cut interest rates since November 2020. Lower interest rates tend to pressure the currencies, however, the value of the AUD will largely depend on how frequently the RBA will cut in 2025. Tomorrow’s press conference at 04:30 GMT will be key for further indications.


Meanwhile, the Commonwealth Bank of Australia reported a 2.0% year-on-year profit increase, reaching $5.13 billion for the six months ending December 31. The bank also posted a 7.0% profit increase for the second half of its 2024 financial year, surpassing analysts' expectations of $5.06 billion. It announced an interim dividend of $2.25 per share, a 5.0% increase from the previous year.


Following the earnings release, the bank's shares surged 2.4%, making them the top gainers on the ASX 200 and hitting a record high of $165.98. While Australian households and businesses continue to face rising living costs, experts note a decline in loan defaults and fewer customers seeking financial assistance, largely attributed to low unemployment.


Australia Ban Foreigners from Buying Homes for 2-Years


Australia restricts foreign home purchases for two years to help balance supply and demand. At first, the price of the currency index opened at a lower price (bearish price gap). However, the price has since risen in value and is currently one of the better-performing currencies of the day. So far, the currency has not negatively reacted to the news, but investors remain on the lookout.


Starting April 1, 2025, Australia will ban foreign buyers, including temporary residents and foreign-owned companies, from purchasing homes until March 2027. Housing Minister Clare O’Neil announced the move to address soaring property prices and support local buyers, especially young voters.


EURAUD - Indications and Price Analysis.


The Euro is the day's worst-performing currency and may face further pressure this week amid scrutiny over the German elections. For this reason, the EURAUD currently is witnessing less conflicting price action elements and indications. The EURAUD on a 2-hour timeframe is currently trading below both trend-lines and Moving Averages and below the neutral level of the RSI.


Simultaneously, the EURAUD is also trading lower on the 5-minute timeframe. On the 5-minute timeframe the price is trading below the 200-period SMA and may see sell indications strengthen if the price falls below 1.64452. The next significant support level can be seen at 1.63895.


Key Takeaway Points:


* Australia Ban Foreigners from buying homes for 2 years in an attempt to balance the current supply and demand. The Australian Dollar increases in value on Monday.
* Analysts expect the Reserve Bank of Australia to cut its main Cash Rate by 25 basis points tomorrow morning.
* The Japanese Yen, US Dollar and Australian Dollar are the best-performing currencies of the day so far.
* The Euro is the day's worst-performing currency and may face further pressure this week amid scrutiny over the German elections.


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Please note that times displayed based on local time zone and are from time of writing this report.


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Michalis Efthymiou
HFMarkets


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