AUD/USD faces pressure as Fitch warns on mortgage arrears spike

AUD/USD is trading under pressure near 0.6650 as Fitch Ratings reported a sharper-than-usual rise in Australian mortgage arrears, raising concerns about the country's financial stability. The ratings agency anticipates another RBA rate cut before year-end, which could further weigh on the Australian dollar. Despite mortgage stress, housing prices rebounded 0.9% quarter-on-quarter after a small Q4 2024 decline. Fitch expects continued gains in 2025, supported by limited housing supply, falling interest rates, and strong migration flows. The mixed signals create uncertainty for AUD traders, with mortgage arrears suggesting economic weakness while rising property prices indicate resilience. Technical resistance sits at 0.6700, while support has formed at 0.6620. The outlook remains cautiously bearish for AUD/USD as rate cut expectations and financial stability concerns outweigh positive housing data.