Tag: AUDUSD

  • Australian Dollar falls due to risk-off sentiment amid escalating Israel-Iran tensions

    Australian Dollar falls due to risk-off sentiment amid escalating Israel-Iran tensions


    • The Australian Dollar declines due to dampened risk sentiment amid rising tensions in the Middle East.
    • Israeli military officials said that Israel attacked dozens of nuclear sites across Iran.
    • The US Producer Price Index rose 0.1% MoM in May, against the expectation of a 0.2% rise.

    The Australian Dollar (AUD) declines against the US Dollar (USD) on Friday, with over 1% losses. The AUD/USD pair depreciates due to escalating tensions in the Middle East.

    Israeli Minister of Defense Israel Katz warned his country to face a missile and drone attack following Israel’s preemptive attack on Iran. Katz declared a special state of emergency in the country, per Axios. Israeli military officials said that Israel attacked dozens of sites across Iran, as the Iranian nuclear program is an existential threat to Israel.

    Reuters reported that US President Donald Trump expanded steel tariffs starting June 23 on imported “steel derivative products,” including household appliances, such as dishwashers, washing machines, refrigerators, etc. The tariffs were initially imposed at 25% in March and later doubled to 50% for most countries. This is the second time the scope of affected products has been expanded.

    Australian Dollar depreciates as US Dollar advances due to improved safe-haven demand

    • The US Dollar Index (DXY), which measures the value of the US Dollar against six major currencies, is recovering losses and trading higher at around 98.10 at the time of writing. The US Michigan Consumer Sentiment will be eyed later on Friday.
    • The US Producer Price Index (PPI) climbed 0.1% month-over-month in May, compared to a decline of 0.2% (revised from -0.5%). This reading came in softer than the expected 0.2% rise. Meanwhile, the core PPI, excluding food and energy, increased 0.1% MoM in May versus -0.2% prior (revised from -0.4%), below the consensus of 0.3%.
    • President Trump posted on Truth Social on Wednesday that the trade deal with China is done and added that it is subject to his and Chinese President Xi Jinping’s final approval. “We are getting a total of 55% tariffs, China is getting 10%. Relationship is excellent! Thank you for your attention to this matter.”
    • China will grant only six-month rare-earth export licenses for US automakers and manufacturers, which suggests that China wants to have control over critical minerals as leverage in future talks, per the Wall Street Journal (gated).
    • The US Consumer Price Index (CPI) rose 2.4% YoY in May, slightly above 2.3% prior but below the market expectations of a 2.5% increase. The core CPI, which excludes volatile food and energy prices, climbed 2.8% YoY in May, compared to the consensus of 2.9%.
    • On Wednesday, President Trump stated that he would like to extend the trade talks deadline, but doesn’t think it will be necessary. Trump further stated that he will set unilateral tariff rates within two weeks.
    • The US Court of Appeals for the Federal Circuit extended an earlier, temporary respite on Tuesday for the government as it presses a challenge to a lower court ruling last month that blocked the tariffs. The federal appeals court has ruled that President Trump’s broad tariffs can remain in effect while legal appeals continue, per Bloomberg.
    • China’s Trade Balance (CNY) arrived at CNY743.56 billion in May, expanding from the previous surplus of CNY689.99 billion. Meanwhile, Exports rose 6.3% YoY against 9.3% in April. The country’s imports fell 2.1% YoY in the same period, from a 0.8% rise recorded previously.
    • Australia’s Trade Balance posted a 5,413M surplus month-over-month in April, below the 6,100M expected and 6,892M (revised from 6,900M) in the previous reading. Exports declined by 2.4% MoM in April, against a 7.2% rise prior (revised from 7.6%). Meanwhile, Imports rose by 1.1%, compared to a decline of 2.4% (revised from -2.2%) seen in March. China’s Caixin Services PMI rose to 51.1 in May as expected, from 50.7 in April.

    Australian Dollar falls toward 0.6450 near 50-day EMA

    AUD/USD pair trading around 0.6460 on Friday. The daily chart’s technical analysis indicates a weakening of the bullish bias as the pair has breached below the lower boundary of the ascending channel. Additionally, the pair moving below the nine-day Exponential Moving Average (EMA) suggests that short-term price momentum is weakening. However, the 14-day Relative Strength Index (RSI) is still positioned slightly above the 50 mark, indicating a bullish bias is in play.

    On the downside, the AUD/USD pair may further test the 50-day EMA at 0.6423. A break below this level may weaken the medium-term price momentum and put downward pressure on the pair to navigate the region around 0.5914, the lowest since March 2020.

    The immediate barrier appears at the nine-day EMA of 0.6495, followed by the seven-month high of 0.6538, which was reached on June 5. Further advances could prompt the pair to explore the region around the eight-month high at 0.6687, followed by the upper boundary of the ascending channel around 0.6730.

    AUD/USD: Daily Chart

    Australian Dollar PRICE Today

    The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the weakest against the Swiss Franc.

    USD EUR GBP JPY CAD AUD NZD CHF
    USD 0.45% 0.45% 0.17% 0.22% 0.76% 0.77% -0.15%
    EUR -0.45% 0.04% -0.23% -0.16% 0.40% 0.29% -0.59%
    GBP -0.45% -0.04% -0.33% -0.28% 0.27% 0.23% -0.62%
    JPY -0.17% 0.23% 0.33% 0.09% 0.61% 0.59% -0.30%
    CAD -0.22% 0.16% 0.28% -0.09% 0.52% 0.55% -0.34%
    AUD -0.76% -0.40% -0.27% -0.61% -0.52% -0.02% -0.89%
    NZD -0.77% -0.29% -0.23% -0.59% -0.55% 0.02% -0.86%
    CHF 0.15% 0.59% 0.62% 0.30% 0.34% 0.89% 0.86%

    The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).

    Tariffs FAQs

    Tariffs are customs duties levied on certain merchandise imports or a category of products. Tariffs are designed to help local producers and manufacturers be more competitive in the market by providing a price advantage over similar goods that can be imported. Tariffs are widely used as tools of protectionism, along with trade barriers and import quotas.

    Although tariffs and taxes both generate government revenue to fund public goods and services, they have several distinctions. Tariffs are prepaid at the port of entry, while taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and businesses, while tariffs are paid by importers.

    There are two schools of thought among economists regarding the usage of tariffs. While some argue that tariffs are necessary to protect domestic industries and address trade imbalances, others see them as a harmful tool that could potentially drive prices higher over the long term and lead to a damaging trade war by encouraging tit-for-tat tariffs.

    During the run-up to the presidential election in November 2024, Donald Trump made it clear that he intends to use tariffs to support the US economy and American producers. In 2024, Mexico, China and Canada accounted for 42% of total US imports. In this period, Mexico stood out as the top exporter with $466.6 billion, according to the US Census Bureau. Hence, Trump wants to focus on these three nations when imposing tariffs. He also plans to use the revenue generated through tariffs to lower personal income taxes.



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  • AUD/USD climbs to new highs north of 0.6500

    AUD/USD climbs to new highs north of 0.6500


    • AUD/USD adds to the weekly advance, surpassing the 0.6500 mark.
    • The US Dollar remains under pressure from economic data, US-China trade deal.
    • The US CPI fell below consensus, rising by 2.4% YoY in May.

    The upward trend in the Aussie Dollar (AUD) continues unabated this week, with AUD/USD advancing for the third consecutive day and reaching new yearly peaks near the 0.6550 level.

    AUD/USD propped up by USD selling, trade optimism

    The pair keeps its weekly recovery well in place on Wednesday in response to further pessimism hurting the Greenback, while auspicious news on the trade front also alleviated concerns over a protracted trade war.

    Indeed, the US Dollar accelerated its losses after US inflation figures showed the CPI rising less than initially estimated by 2.4% in the year to May. The core reading followed suit, coming in short of expectations and rising 2.8% from a year earlier.

    The weaker-than-expected US data has prompted investors to accelerate their bets of a probable rate cut by the Federal Reserve at its September gathering.

    Back to trade, US and China officials appear to have reached some common ground regarding rare earths at their gathering in London, although the agreement still needs confirmation from both President Trump and China’s Xi Jinping.

    Next on tap in Oz

    Given the lack of data releases in Australia on Wednesday, investors’ attention shifts to the Melbourne Institute’s release of Inflation Expectations on Thursday.

    What about techs?

    AUD/USD is trading in the low-0.6500s and is expected to face initial resistance at the YTD peak of 0.6545 (June 11), seconded by the November 2024 high of 0.6687 (November 7) and the 2024 top of 0.6942 (September 30), all preceding the key 0.7000 hurdle.

    On the other hand, the resumption of the bearish trend could spark an initial drop to the critical 200-day SMA at 0.6434, prior to the May trough of 0.6356 (May 12). The latter appears reinforced by the proximity of the provisional contention at the 55-day and 100-day SMAs at 0.6379 and 0.6342, respectively.

    The RSI near 59 suggests that further gains should remain in the pipeline in the short-term horizon, while the ADX past 26 is indicative of a modest strength of the trend.



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  • AUD/USD rises above 0.6500 ahead of US CPI

    AUD/USD rises above 0.6500 ahead of US CPI


    • AUD/USD trades near 0.6520 at the time of writing, with US-China relations increasing demand for commodity-linked currencies.
    • Australia’s Westpac Consumer Confidence disappoints, but improving sentiment limits AUD losses.
    • The US Consumer Price Index (CPI) on Wednesday is expected to drive the Fed narrative and US Dollar demand.

    The Australian Dollar (AUD) is consolidating against the US Dollar on Tuesday, as AUD/USD trades above 0.6500 at the time of writing.

    Developments in US-China trade talks in London continued to support risk sentiment, boosting demand. Although the improved relations provided some support for the US Dollar, AUD/USD benefited from Australia’s close ties with China.

    With senior officials from both countries signaling progress, the talks have helped improve broader risk sentiment, offering the Aussie some support in the face of weaker domestic data. On Tuesday, Westpac Consumer Confidence index data for June dropped to 0.5%, down from 2.2% in May, signaling a notable decline in household sentiment. 

    However, since China is Australia’s largest trading partner, easing tensions between the US and China also helps support demand for commodities, a prominent driver of the AUD/USD price pair.

    US CPI and Fed expectations provide an additional headwind for the Greenback 

    Looking ahead, markets remain focused on the monetary policy divergence between the Federal Reserve(Fed) and the Reserve Bank of Australia (RBA). 

    On Wednesday, the United States will release the Consumer Price Index (CPI) for May, which is expected to inform expectations for the Fed.

    Headline inflation is projected to rise to 0.3% MoM in May, up from 0.2% in April, with the annual rate climbing to 2.5% from 2.3%. 

    Core CPI, which strips out food and energy prices, is also forecast to increase 0.3% MoM, compared to 0.2% previously, with the annual reading rising to 2.9% from 2.8%. 

    According to the CME FedWatch Tool, market participants expect the Fed to leave interest rates unchanged within the current 4.25% to 4.50% range at both the June and July meetings, with a 53.6% probability of a rate cut priced in for September.

    If inflation shows additional signs of easing, the Fed could adopt a more flexible approach to its monetary path, which could ease near-term rate expectations. Softer rate expectations could support the AUD, while rising inflation will likely solidify a pushback in Fed rate cut bets, providing support for the US Dollar.

    Australian Dollar FAQs

    One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD.

    The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive.

    China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs.

    Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD.

    The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.



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  • AUD/USD drifts below 0.6500 with the Dollar picking up ahead of the NFP report

    AUD/USD drifts below 0.6500 with the Dollar picking up ahead of the NFP report


    • FX traders are paring back their USD short positions ahead of the US NFP release.
    • US Nonfarm Payrolls are expected to show a 130,000 increase in May.
    • A weaker-than-expected reading might heighten hopes of Fed easing and send the USD lower.

    The Australian Dollar extends losses below 0.6500 on Friday as traders trim their US Dollar short positions ahead of the US Nonfarm Payrolls report. The pair’s broader trend remains positive, but the double top at 0.6530 hints at a strong resistance area.

    All eyes today are on the US Nonfarm payrolls report, which will be observed with particular interest, after a string of negative US releases earlier this week revived fears of a recession.

    Market forecasts anticipate a 130,000 increment on private employment in May, following a 177,000 rise in April, with the Unemployment Rate steady at the previous 4.2% level.

    Downbeat NFP figures might boost hopes of Fed easing

    Earlier this week, ADP Employment figures showed a much lower than expected reading, 37k against the 115K expected. Beyond that, Manufacturing activity contracted beyond forecasts and, unexpectedly, the Services sector showed a similar picture. After these figures, markets are wondering whether a 130K increase in Payrolls is not too optimistic a view.

    Another weak release today will increase concerns about the US economic momentum and might convince the Fed to abandon its neutral stance and lower interest rates further to avoid a deeper economic slowdown. This might add pressure on the USD.

    The Australian calendar has been light today, although the impact of a softer-than-expected Australian GDP and the RBA’s dovish minutes has been minimal, with US economic data and Trump’s ongoing tariff saga as the main market movers this week.

    Nonfarm Payrolls FAQs

    Nonfarm Payrolls (NFP) are part of the US Bureau of Labor Statistics monthly jobs report. The Nonfarm Payrolls component specifically measures the change in the number of people employed in the US during the previous month, excluding the farming industry.

    The Nonfarm Payrolls figure can influence the decisions of the Federal Reserve by providing a measure of how successfully the Fed is meeting its mandate of fostering full employment and 2% inflation.
    A relatively high NFP figure means more people are in employment, earning more money and therefore probably spending more. A relatively low Nonfarm Payrolls’ result, on the either hand, could mean people are struggling to find work.
    The Fed will typically raise interest rates to combat high inflation triggered by low unemployment, and lower them to stimulate a stagnant labor market.

    Nonfarm Payrolls generally have a positive correlation with the US Dollar. This means when payrolls’ figures come out higher-than-expected the USD tends to rally and vice versa when they are lower.
    NFPs influence the US Dollar by virtue of their impact on inflation, monetary policy expectations and interest rates. A higher NFP usually means the Federal Reserve will be more tight in its monetary policy, supporting the USD.

    Nonfarm Payrolls are generally negatively-correlated with the price of Gold. This means a higher-than-expected payrolls’ figure will have a depressing effect on the Gold price and vice versa.
    Higher NFP generally has a positive effect on the value of the USD, and like most major commodities Gold is priced in US Dollars. If the USD gains in value, therefore, it requires less Dollars to buy an ounce of Gold.
    Also, higher interest rates (typically helped higher NFPs) also lessen the attractiveness of Gold as an investment compared to staying in cash, where the money will at least earn interest.

    Nonfarm Payrolls is only one component within a bigger jobs report and it can be overshadowed by the other components.
    At times, when NFP come out higher-than-forecast, but the Average Weekly Earnings is lower than expected, the market has ignored the potentially inflationary effect of the headline result and interpreted the fall in earnings as deflationary.
    The Participation Rate and the Average Weekly Hours components can also influence the market reaction, but only in seldom events like the “Great Resignation” or the Global Financial Crisis.



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  • Australian Dollar falls due to risk-off sentiment amid escalating Israel-Iran tensions

    Australian Dollar falls, downside seems limited amid market caution ahead US NFP


    • The Australian Dollar may consolidate as traders adopt caution ahead of the US NFP release.
    • President Trump described the call as productive, and negotiations on tariffs are set to continue.
    • US Nonfarm Payrolls could have added 130,000 jobs in May, meanwhile, the Unemployment Rate is expected to hold steady at 4.2%.

    The Australian Dollar (AUD) declines against the US Dollar (USD) on Friday. The AUD/USD pair may remain stable amid market caution, as traders await the upcoming US Nonfarm Payrolls (NFP) report, due later in the day, seeking fresh insights into the United States (US) economy.

    Market sentiment improved following a productive phone call between US President Donald Trump and Chinese President Xi Jinping. Trump expressed that the call was productive and prepared to continue tariff negotiations. However, Trump and his team struggled to stay composed with Chinese trade officials. It is essential to note that any changes in the Chinese economy could impact the AUD, as China and Australia are close trade partners.

    Reserve Bank of Australia (RBA) Minutes of its May meeting suggested that the policymakers viewed the case for a 25 basis point cut as stronger, preferring a policy to be cautious and predictable. RBA Assistant Governor Sarah Hunter expressed caution on Tuesday that “higher US tariffs will put a drag on the global economy,” and warned that higher uncertainty could dampen investment, output, and employment in Australia.

    Australian Dollar struggles as US Dollar recovers losses ahead of NFP data

    • The US Dollar Index (DXY), which measures the value of the US Dollar against six major currencies, is trading higher at around 98.80 at the time of writing. The upcoming US Nonfarm Payrolls is expected to have added 130,000 jobs in May, below the 177,000 increase in April. The Unemployment Rate is also expected to hold steady at 4.2%.
    • Weekly Initial Jobless Claims rose to 247,000, above the expected 235,000, as data released by the US Department of Labor. Thursday’s US ADP private sector employment rose 37,000 in May, against a 60,000 increase (revised from 62,000) recorded in April, far below the market expectation of 115,000.
    • Institute for Supply Management’s (ISM) Services Purchasing Managers Index (PMI) declined to 49.9 in May, from 51.6 in April. This reading surprisingly came in weaker than the expected 52.0. Meanwhile,
    • US President Donald Trump called upon, in a post published on Truth Social on Wednesday, Federal Reserve (Fed) Chairman Jerome Powell to lower the policy rate. “ADP NUMBER OUT!!! “Too Late” Powell must now LOWER THE RATE. He is unbelievable!!! Europe has lowered NINE TIMES,” Trump said.
    • On Wednesday, Minneapolis Fed President Neel Kashkari noted that the labor market is showing some signs of slowing down. However, persistent uncertainty prevails over the economy, and the Fed must stay in wait-and-see mode to assess how the economy responds to the uncertainty.
    • House Republicans passed Trump’s “Big Beautiful Bill,” a multitrillion-dollar tax and spending package, which could increase the US fiscal deficit, along with the risk of bond yields staying higher for longer. This scenario raises concerns over the US economy and prompts traders to sell American assets under the “Sell America” trend. Policy experts anticipate Senate changes as GOP lawmakers aim to finalize the “big bill” by July 4.
    • The former biggest Donald Trump backer, Elon Musk, has been attacking Trump’s ‘big beautiful budget bill’ this week via social media. Musk has been openly mocking the Trump budget, which he had played a key role in creating. He criticized that the Trump budget codifies functionally none of the federal spending cuts that he swiftly executed at the start of Trump’s second term without Congressional oversight.
    • Last week, Trump accused China of breaching a truce on tariffs reached earlier this month. Washington and Beijing agreed to temporarily lower reciprocal tariffs in a meeting in Geneva. Trump said that China had “totally violated its agreement with us.” US Trade Representative Jamieson Greer also said that China had failed to remove non-tariff barriers as agreed. In response, a spokesperson from China’s Ministry of Commerce said on Monday that China had complied with the agreement by cancelling or suspending relevant tariff and non-tariff measures aimed at US “reciprocal tariffs.”
    • China’s Caixin Manufacturing Purchasing Managers’ Index (PMI) unexpectedly fell to 48.3 in May from 50.4 in April, falling short of the market expectations of a 50.6 expansion. However, the weekend data showed that the National Bureau of Statistics (NBS) Manufacturing PMI rose to 49.5 in May, from April’s 49.0 reading. Meanwhile, the Non-Manufacturing PMI declined to 50.3 from the previous 50.4 figure, falling short of the expected reading of 50.6. The Aussie Dollar could be impacted by Chinese economic data as both countries are close trading partners.
    • Australia’s Trade Balance posted a 5,413M surplus month-over-month in April, below the 6,100M expected and 6,892M (revised from 6,900M) in the previous reading. Exports declined by 2.4% MoM in April, against a 7.2% rise prior (revised from 7.6%). Meanwhile, Imports rose by 1.1%, compared to a decline of 2.4% (revised from -2.2%) seen in March. China’s Caixin Services PMI rose to 51.1 in May as expected, from 50.7 in April.
    • The Australian Bureau of Statistics (ABS) showed that Gross Domestic Product (GDP) grew by 0.2% quarter-over-quarter in Q1, declining from the previous 0.6% growth. Australia’s economy fell short of the expected 0.4% rise. Meanwhile, the annual GDP growth rate remained consistent at 1.3%, below the expected 1.5%.

    Australian Dollar stays above 0.6500, could target seven-month highs

    The AUD/USD pair is trading around 0.6510 on Friday. The daily chart’s technical analysis suggests the prevailing bullish bias as the pair remains within the ascending channel pattern. Additionally, the short-term price momentum remains stronger as the pair stays above the nine-day Exponential Moving Average (EMA). The 14-day Relative Strength Index (RSI) is also positioned above the 50 mark, suggesting a bullish outlook.

    On the upside, the AUD/USD pair may target a seven-month high of 0.6538, which was recorded on June 5. The pair can also explore the region around the upper boundary of the ascending channel around 0.6680, aligned with the eight-month high at 0.6687.

    The primary support appears at the nine-day EMA of 0.6478, aligned with the ascending channel’s lower boundary around 0.6470. Further decline could weaken the bullish bias and lead the AUD/USD pair to test the 50-day EMA at 0.6405.

    AUD/USD: Daily Chart

    Australian Dollar PRICE Today

    The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the weakest against the Canadian Dollar.

    USD EUR GBP JPY CAD AUD NZD CHF
    USD 0.05% -0.00% 0.17% -0.08% 0.17% -0.04% 0.06%
    EUR -0.05% -0.04% 0.10% -0.12% 0.07% -0.08% 0.02%
    GBP 0.00% 0.04% 0.14% -0.07% 0.11% -0.03% 0.06%
    JPY -0.17% -0.10% -0.14% -0.18% 0.13% -0.07% -0.16%
    CAD 0.08% 0.12% 0.07% 0.18% 0.24% 0.05% 0.13%
    AUD -0.17% -0.07% -0.11% -0.13% -0.24% -0.14% -0.03%
    NZD 0.04% 0.08% 0.03% 0.07% -0.05% 0.14% 0.09%
    CHF -0.06% -0.02% -0.06% 0.16% -0.13% 0.03% -0.09%

    The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).

    Risk sentiment FAQs

    In the world of financial jargon the two widely used terms “risk-on” and “risk off” refer to the level of risk that investors are willing to stomach during the period referenced. In a “risk-on” market, investors are optimistic about the future and more willing to buy risky assets. In a “risk-off” market investors start to ‘play it safe’ because they are worried about the future, and therefore buy less risky assets that are more certain of bringing a return, even if it is relatively modest.

    Typically, during periods of “risk-on”, stock markets will rise, most commodities – except Gold – will also gain in value, since they benefit from a positive growth outlook. The currencies of nations that are heavy commodity exporters strengthen because of increased demand, and Cryptocurrencies rise. In a “risk-off” market, Bonds go up – especially major government Bonds – Gold shines, and safe-haven currencies such as the Japanese Yen, Swiss Franc and US Dollar all benefit.

    The Australian Dollar (AUD), the Canadian Dollar (CAD), the New Zealand Dollar (NZD) and minor FX like the Ruble (RUB) and the South African Rand (ZAR), all tend to rise in markets that are “risk-on”. This is because the economies of these currencies are heavily reliant on commodity exports for growth, and commodities tend to rise in price during risk-on periods. This is because investors foresee greater demand for raw materials in the future due to heightened economic activity.

    The major currencies that tend to rise during periods of “risk-off” are the US Dollar (USD), the Japanese Yen (JPY) and the Swiss Franc (CHF). The US Dollar, because it is the world’s reserve currency, and because in times of crisis investors buy US government debt, which is seen as safe because the largest economy in the world is unlikely to default. The Yen, from increased demand for Japanese government bonds, because a high proportion are held by domestic investors who are unlikely to dump them – even in a crisis. The Swiss Franc, because strict Swiss banking laws offer investors enhanced capital protection.



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  • Australian Dollar edges lower as US Dollar recovers recent losses

    Australian Dollar edges lower as US Dollar recovers recent losses


    • The Australian Dollar offered its daily gains as the Greenback edged higher.
    • Australia’s Gross Domestic Product expanded 0.2% QoQ in Q1, against the previous 0.6% growth.
    • The US Dollar faced challenges as tariff uncertainty may hurt growth in the US economy.

    The Australian Dollar (AUD) loses ground against the US Dollar (USD) on Wednesday after offering its daily gains. However, the AUD/USD pair remained in positive territory following the release of mixed economic data from Australia.

    Australian Bureau of Statistics (ABS) showed that Gross Domestic Product (GDP) grew by 0.2% quarter-over-quarter in Q1, declining from the previous 0.6% growth. Australia’s economy fell short of the expected 0.4% rise. Meanwhile, the annual GDP growth rate remained consistent at 1.3%, below the expected 1.5%.

    Moreover, the S&P Global Australia Composite Purchasing Managers’ Index (PMI) fell to 50.5 in May from April’s 51.0 reading, expanding for the eighth successive month. However, the pace indicates marginal growth in business activity, albeit the slowest so far in 2025.

    The S&P Global Australia Services PMI came at 50.6 in May, marking a 16th straight month of expansion but at the slowest pace in six months. The Ai Group Manufacturing PMI posted a -23.5 reading, improved slightly from the previous -26.5. Manufacturers experience delays in major projects and rising market hesitation due to global and domestic uncertainty.

    Reserve Bank of Australia (RBA) Assistant Governor Sarah Hunter expressed caution on Tuesday that “higher US tariffs will put a drag on the global economy.” Hunter noted that higher uncertainty could dampen investment, output, and employment in Australia. However, she also added that Australia’s exporters are relatively well-placed to weather the storm and assumes that Chinese authorities will support their economy through fiscal stimulus.

    Australian Dollar declines as US Dollar edges higher on technical correction

    • The US Dollar Index (DXY), which measures the value of the US Dollar against six major currencies, is trading lower at around 99.10 at the time of writing. The Greenback struggles as traders adopt caution amid rising tariff uncertainty and its potential to hurt growth in the US economy.
    • Job Openings and Labor Turnover Survey (JOLTS) showed the number of job openings on the last business day of April stood at 7.39 million, increasing from March’s 7.2 million openings. This figure surprisingly came in above the market expectation of 7.1 million.
    • Institute for Supply Management (ISM) Manufacturing Purchasing Managers’ Index eased to 48.5 in May from 48.7 in April. This figure came in weaker than the expectation of 49.5.
    • US President Donald Trump said at a rally in Pennsylvania on Friday that he planned to double import tariffs on steel and aluminum to build up pressure on global steel producers and intensify the trade war. “We are going to be imposing a 25% increase. We’re going to bring it from 25% to 50% – the tariffs on steel into the United States of America, which will even further secure the steel industry in the United States,” he said, per Reuters.
    • The US Court of Appeals for the Federal Circuit in Washington, on Thursday, temporarily put a hold on a federal court ruling and allowed President Trump’s tariffs to take effect. On Wednesday, a three-judge panel at the Court of International Trade in Manhattan halted Trump from imposing “Liberation Day” tariffs from taking effect. The federal court found that Trump exceeded his authority in imposing broad import tariffs and declared the executive orders issued on April 2 unlawful.
    • House Republicans passed Trump’s “Big Beautiful Bill,” a multitrillion-dollar tax and spending package, which could increase the US fiscal deficit, along with the risk of bond yields staying higher for longer. This scenario raises concerns over the US economy and prompts traders to sell American assets under the “Sell America” trend. Policy experts anticipate Senate changes as GOP lawmakers aim to finalize the “big bill” by July 4.
    • On Friday, Trump accused China of breaching a truce on tariffs reached earlier this month. Washington and Beijing agreed to temporarily lower reciprocal tariffs in a meeting in Geneva. Trump said that China had “totally violated its agreement with us.” US Trade Representative Jamieson Greer also said that China had failed to remove non-tariff barriers as agreed.
    • In response, a spokesperson from China’s Ministry of Commerce said on Monday that China had complied with the agreement by cancelling or suspending relevant tariff and non-tariff measures aimed at US “reciprocal tariffs.”
    • China’s Caixin Manufacturing Purchasing Managers’ Index (PMI) unexpectedly fell to 48.3 in May from 50.4 in April, falling short of the market expectations of a 50.6 expansion. However, the weekend data showed that the National Bureau of Statistics (NBS) Manufacturing PMI rose to 49.5 in May, from April’s 49.0 reading. Meanwhile, the Non-Manufacturing PMI declined to 50.3 from the previous 50.4 figure, falling short of the expected reading of 50.6. The Aussie Dollar could be impacted by Chinese economic data as both countries are close trading partners.
    • RBA Minutes of its May monetary policy meeting suggested that the board viewed the case for a 25 basis point cut as stronger, preferring a policy to be cautious and predictable. The policymakers highlighted that US trade policy posed a significant and adverse impact on the global outlook, but had not yet affected the Australian economy, however, they did not persuade that a 50 bps was needed.
    • The Reserve Bank of Australia (RBA) is expected to deliver more rate cuts in the upcoming policy meetings. The central bank acknowledged progress in curbing inflation and warned that US-China trade barriers pose downside risks to economic growth. Governor Michele Bullock stated that the RBA is prepared to take additional action if the economic outlook deteriorates sharply, raising the prospect of future rate cuts.

    Australian Dollar finds immediate support at nine-day EMA near 0.6450

    AUD/USD is trading around 0.6470 on Wednesday, indicating a prevailing bullish bias. The daily chart’s technical analysis suggests that the pair remains within the ascending channel pattern. The short-term price momentum remains stronger as the pair stays above the nine-day Exponential Moving Average (EMA). Additionally, the 14-day Relative Strength Index (RSI) is positioned above the 50 mark, indicating a persistent bullish outlook.

    On the upside, the AUD/USD pair could approach 0.6537, a seven-month high recorded on May 26. A break above this initial barrier could support the pair to explore the region around the upper boundary of the ascending channel around 0.6670.

    The immediate support appears at the nine-day EMA of 0.6456, aligned with the ascending channel’s lower boundary around 0.6450. A successful breach below this crucial support zone could dampen the bullish bias and lead the AUD/USD pair to test the 50-day EMA at 0.6395.

    AUD/USD: Daily Chart

    Australian Dollar PRICE Today

    The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the weakest against the US Dollar.

    USD EUR GBP JPY CAD AUD NZD CHF
    USD 0.04% 0.05% 0.26% 0.02% 0.09% 0.02% 0.05%
    EUR -0.04% -0.01% 0.20% -0.03% 0.04% -0.03% 0.00%
    GBP -0.05% 0.01% 0.18% -0.02% 0.06% -0.02% 0.02%
    JPY -0.26% -0.20% -0.18% -0.21% -0.22% -0.18% -0.17%
    CAD -0.02% 0.03% 0.02% 0.21% 0.06% -0.01% 0.02%
    AUD -0.09% -0.04% -0.06% 0.22% -0.06% -0.08% -0.04%
    NZD -0.02% 0.03% 0.02% 0.18% 0.01% 0.08% 0.03%
    CHF -0.05% -0.01% -0.02% 0.17% -0.02% 0.04% -0.03%

    The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).

    RBA FAQs

    The Reserve Bank of Australia (RBA) sets interest rates and manages monetary policy for Australia. Decisions are made by a board of governors at 11 meetings a year and ad hoc emergency meetings as required. The RBA’s primary mandate is to maintain price stability, which means an inflation rate of 2-3%, but also “..to contribute to the stability of the currency, full employment, and the economic prosperity and welfare of the Australian people.” Its main tool for achieving this is by raising or lowering interest rates. Relatively high interest rates will strengthen the Australian Dollar (AUD) and vice versa. Other RBA tools include quantitative easing and tightening.

    While inflation had always traditionally been thought of as a negative factor for currencies since it lowers the value of money in general, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Moderately higher inflation now tends to lead central banks to put up their interest rates, which in turn has the effect of attracting more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in the case of Australia is the Aussie Dollar.

    Macroeconomic data gauges the health of an economy and can have an impact on the value of its currency. Investors prefer to invest their capital in economies that are safe and growing rather than precarious and shrinking. Greater capital inflows increase the aggregate demand and value of the domestic currency. Classic indicators, such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can influence AUD. A strong economy may encourage the Reserve Bank of Australia to put up interest rates, also supporting AUD.

    Quantitative Easing (QE) is a tool used in extreme situations when lowering interest rates is not enough to restore the flow of credit in the economy. QE is the process by which the Reserve Bank of Australia (RBA) prints Australian Dollars (AUD) for the purpose of buying assets – usually government or corporate bonds – from financial institutions, thereby providing them with much-needed liquidity. QE usually results in a weaker AUD.

    Quantitative tightening (QT) is the reverse of QE. It is undertaken after QE when an economic recovery is underway and inflation starts rising. Whilst in QE the Reserve Bank of Australia (RBA) purchases government and corporate bonds from financial institutions to provide them with liquidity, in QT the RBA stops buying more assets, and stops reinvesting the principal maturing on the bonds it already holds. It would be positive (or bullish) for the Australian Dollar.



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  • Australian Dollar depreciates as RBA reduces Official Cash Rate by 25 basis points

    Australian Dollar depreciates as RBA reduces Official Cash Rate by 25 basis points


    • The Australian Dollar falls as the Reserve Bank of Australia implements 25 basis point rate cut.
    • The People’s Bank of China cut its one-year Loan Prime Rate to 3.00% from 3.10% on Tuesday.
    • The US Dollar weakened following Moody’s downgrade of the US credit rating from Aaa to Aa1.

    The Australian Dollar (AUD) dips against the US Dollar (USD) on Tuesday, following a gain of over 0.50% in the previous session. The AUD/USD pair remains under pressure after the interest rate decisions from the Reserve Bank of Australia (RBA) and the People’s Bank of China (PBoC).

    The RBA board voted to cut the Official Cash Rate (OCR) by 25 basis points, reducing it from 4.1% to 3.85% at the conclusion of its May monetary policy meeting. The move was largely expected by markets.

    The PBoC announced a reduction in its Loan Prime Rates (LPRs) on Tuesday. The one-year LPR was lowered from 3.10% to 3.00%, while the five-year LPR was reduced from 3.60% to 3.50%. Given the close trade relationship between Australia and China, any change in the Chinese markets can significantly impact the Aussie Dollar.

    The Australian Dollar continues to weaken due to escalating political turmoil in Australia. The opposition coalition fractured after the National Party withdrew from its alliance with the Liberal Party. Meanwhile, the ruling Labor Party returned to power with a stronger and broader mandate, capitalizing on the disarray within the Opposition.

    Market attention now turns to the Reserve Bank of Australia’s (RBA) upcoming rate decision scheduled for later in the day. The central bank is expected to cut interest rates by 25 basis points, following last week’s stronger-than-anticipated employment data.

    The AUD/USD pair strengthened on Monday as the US Dollar weakened in the wake of Moody’s Ratings downgrading the US credit rating from Aaa to Aa1. This move aligns with similar downgrades by Fitch Ratings in 2023 and Standard & Poor’s in 2011. Moody’s now projects US federal debt to climb to around 134% of GDP by 2035, up from 98% in 2023, with the budget deficit expected to widen to nearly 9% of GDP. This deterioration is attributed to rising debt-servicing costs, expanding entitlement programs, and falling tax revenues.

    Australian Dollar depreciates despite a weaker US Dollar amid a dovish Fed

    • The US Dollar Index (DXY), which tracks the US Dollar (USD) against a basket of six major currencies, is remaining subdued and trading lower at around 100.40 at the time of writing.
    • Economic data released last week pointed to easing inflation, as both the Consumer Price Index (CPI) and Producer Price Index (PPI) signaled a deceleration in price pressures. This has heightened expectations that the Federal Reserve may implement additional rate cuts in 2025, contributing to further weakness in the US Dollar. Additionally, disappointing US Retail Sales figures have deepened concerns over an extended period of sluggish economic growth.
    • US President Donald Trump told Fox News that he is working to gain greater access to China, describing the relationship as excellent and expressing willingness to negotiate directly with President Xi on a potential deal.
    • Trump administration plans to add several Chinese chipmakers to its export blacklist, known as the “entity list.” According to the Financial Times, Trump administration officials expressed concern late Thursday that imposing export controls on key Chinese firms at this stage could undermine the recently reached trade agreement between China and the US during talks in Geneva over the weekend.
    • The National Bureau of Statistics (NBS) reported on Monday that China’s Retail Sales rose by 5.1% year-over-year (YoY) in April, falling short of the 5.5% forecast and down from 5.9% in March. Industrial Production grew by 6.1% YoY during the same period, beating the expected 5.5% but slowing from the previous 7.7% growth.
    • The risk-sensitive Australian Dollar gained support from renewed optimism surrounding a 90-day US-China trade truce and hopes for further trade deals with other countries. Meanwhile, US Treasury Secretary Scott Bessent told CNN on Sunday that President Donald Trump intends to implement tariffs at previously threatened levels on trading partners that do not engage in negotiations “in good faith.”
    • According to the Australian Bureau of Statistics (ABS), employment surged by 89,000 in April, significantly higher than the 36,400 increase in March and far above the forecasted 20,000. Meanwhile, the Unemployment Rate remained unchanged at 4.1%.
    • Australia’s seasonally adjusted Wage Price Index rose by 3.4% year-over-year in Q1 2025, up from a 3.2% increase in Q1 2024 and surpassing market forecasts of a 3.2% gain. This marks a recovery from the prior quarter, which recorded the slowest wage growth since Q3 2022. On a quarterly basis, the index climbed 0.9% in Q1, surpassing the projected 0.8% rise.

    Australian Dollar hovers around 0.6450, support appears at nine-day EMA

    AUD/USD is trading near 0.6450 on Tuesday, with technical indicators on the daily chart pointing to a bullish bias. The pair remains above the nine-day Exponential Moving Average (EMA), while the 14-day Relative Strength Index (RSI) holds above the 50 mark, suggesting continued upward momentum.

    On the upside, immediate resistance is located at the six-month high of 0.6515, posted on December 2, 2024. A sustained break above this level could open the door to the seven-month high of 0.6687 from November 2024.

    Support is initially seen at the nine-day EMA of 0.6429, followed by the 50-day EMA around 0.6363. A clear drop below these levels would likely weaken the short- to medium-term outlook, potentially triggering a deeper decline toward the March 2020 low of 0.5914.

    AUD/USD: Daily Chart

    Australian Dollar PRICE Today

    The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the weakest against the Japanese Yen.

    USD EUR GBP JPY CAD AUD NZD CHF
    USD -0.03% -0.03% -0.07% 0.09% 0.43% 0.22% -0.09%
    EUR 0.03% 0.00% -0.02% 0.13% 0.47% 0.27% -0.06%
    GBP 0.03% -0.00% -0.06% 0.12% 0.44% 0.28% -0.02%
    JPY 0.07% 0.02% 0.06% 0.16% 0.50% 0.29% 0.03%
    CAD -0.09% -0.13% -0.12% -0.16% 0.35% 0.13% -0.15%
    AUD -0.43% -0.47% -0.44% -0.50% -0.35% -0.20% -0.49%
    NZD -0.22% -0.27% -0.28% -0.29% -0.13% 0.20% -0.28%
    CHF 0.09% 0.06% 0.02% -0.03% 0.15% 0.49% 0.28%

    The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).

    Economic Indicator

    RBA Interest Rate Decision

    The Reserve Bank of Australia (RBA) announces its interest rate decision at the end of its eight scheduled meetings per year. If the RBA is hawkish about the inflationary outlook of the economy and raises interest rates it is usually bullish for the Australian Dollar (AUD). Likewise, if the RBA has a dovish view on the Australian economy and keeps interest rates unchanged, or cuts them, it is seen as bearish for AUD.


    Read more.

    Last release:
    Tue May 20, 2025 04:30

    Frequency:
    Irregular

    Actual:
    3.85%

    Consensus:
    3.85%

    Previous:
    4.1%

    Source:

    Reserve Bank of Australia



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  • AUD/USD holds steady above 0.6400 ahead of Chinese macro data

    AUD/USD holds steady above 0.6400 ahead of Chinese macro data


    • AUD/USD struggles to gain any meaningful traction amid mixed fundamental cues.
    • A weaker risk tone caps the Aussie, though a weaker USD lends support to the pair.
    • Traders look to Chinese macro data for some impetus ahead of the RBA on Tuesday.

    The AUD/USD pair kicks off the new week on a subdued note and consolidates just above the 0.6400 round-figure mark during the Asian session. Moreover, spot prices remain confined in a familiar range held over the past month or so as traders await a fresh catalyst before positioning for the next leg of a directional move.

    In the meantime, Monday’s Chinese macro data dump could provide some impetus to the AUD/USD pair and allow traders to grab short-term opportunities. The immediate market reaction, however, is more likely to be limited as the focus remains glued to the crucial Reserve Bank of Australia (RBA) policy decision on Tuesday.

    The Australian central bank is widely expected to cut its key rate by 25 basis points (bps) and lower borrowing costs twice more this year amid easing inflation and growth concerns on the back of trade tensions. However, the de-escalation of the US-China trade war has tempered bets for more aggressive policy easing by the RBA.

    Nevertheless, the policy outlook will influence the Australian Dollar (AUD) and determine the next leg of a directional move for the AUD/USD pair. Heading into the key central bank event risk, a turnaround in the global risk sentiment – as depicted by a generally weaker tone around the equity markets – is seen capping the Aussie.

    A surprise downgrade of the US government’s credit rating tempers investors’ appetite for riskier assets. Apart from this, bets for more interest rate cuts by the Federal Reserve (Fed) keep the US Dollar (USD) depressed, which, in turn, might continue to act as a tailwind for the AUD/USD pair and warrants some caution for bearish traders.

    Australian Dollar FAQs

    One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD.

    The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive.

    China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs.

    Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD.

    The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.



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  • Australian Dollar struggles as Trump administration plans to blacklist Chinese chipmakers

    Australian Dollar struggles as Trump administration plans to blacklist Chinese chipmakers


    • The Australian Dollar faces headwinds as the Trump administration moves to add several Chinese chipmakers to its export blacklist.
    • The AUD remains under pressure despite a strong Australian labor market report showing solid job gains in April.
    • The US Dollar continues to trade within a narrow range, as recent US economic data has sent mixed signals to the market.

    The Australian Dollar (AUD) extends its decline against the US Dollar (USD) for a third consecutive session on Friday. The AUD remains under pressure, possibly due to reports that the Trump administration is planning to add several Chinese chipmakers to its export blacklist, known as the “entity list.” Given the close trade relationship between Australia and China, any disruption in the Chinese market can significantly impact the Aussie Dollar.

    According to the Financial Times, Trump administration officials expressed concern late Thursday that imposing export controls on key Chinese firms at this stage could undermine the recently reached trade agreement between China and the US during talks in Geneva over the weekend.

    The AUD struggles despite a strong Australian labor market report, which reported robust job growth in April. The AUD/USD pair struggled even as the Greenback weakened following economic data that fueled speculation the Federal Reserve (Fed) could resume interest rate cuts in the coming months.

    The risk-sensitive AUD/USD pair also failed to benefit from easing global trade tensions. A senior adviser to Iran’s supreme leader, Ali Shamkhani, stated on Wednesday that Iran is ready to sign a nuclear deal with US President Donald Trump. Additionally, the US and China reached a preliminary agreement, under which the US will reduce tariffs on Chinese goods from 145% to 30%, while China will lower its tariffs on US imports from 125% to 10%.

    Australian Dollar struggles despite a weaker US Dollar amid improved risk sentiment

    • The US Dollar Index (DXY), which tracks the Greenback against a basket of six major currencies, is trading lower at around 100.60 at the time of writing. US economic data this week has delivered mixed signals—highlighting the economy’s resilience while also indicating a slowdown in growth momentum, which has kept the dollar confined to a narrow trading range.
    • The US Producer Price Index (PPI) rose 2.4% year-over-year in April, easing from the 2.7% increase in March and falling short of the market expectation of 2.5%. Core PPI, which excludes food and energy, climbed 3.1% annually, down from the previous 4%. On a monthly basis, headline PPI dropped 0.5%, while core PPI fell 0.4%.
    • US Initial Jobless Claims for the week ending May 10 stood at 229,000, unchanged from the revised figure for the previous week, and in line with expectations, according to the US Department of Labor (DOL). Continuing Jobless Claims rose by 9,000 to reach 1.881 million for the week ending May 3.
    • US Consumer Price Index (CPI) rose by 2.3% year-over-year in April, slightly below the 2.4% increase recorded in March and market expectations of 2.4%. Core CPI—which excludes food and energy—also climbed 2.8% annually, matching both the previous figure and forecasts. On a monthly basis, both headline CPI and core CPI rose by 0.2% in April.
    • US President Donald Trump told Fox News that he is working to gain greater access to China, describing the relationship as excellent and expressing willingness to negotiate directly with President Xi on a potential deal.
    • According to the Australian Bureau of Statistics (ABS), employment surged by 89,000 in April, significantly higher than the 36,400 increase in March and far above the forecasted 20,000. Meanwhile, the Unemployment Rate remained unchanged at 4.1%.
    • Australia’s seasonally adjusted Wage Price Index rose by 3.4% year-over-year in Q1 2025, up from a 3.2% increase in Q1 2024 and surpassing market forecasts of a 3.2% gain. This marks a recovery from the prior quarter, which recorded the slowest wage growth since Q3 2022. On a quarterly basis, the index climbed 0.9% in Q1, surpassing the projected 0.8% rise.
    • Australian Prime Minister Anthony Albanese was sworn in for a second term on Tuesday after a decisive election victory. Key cabinet positions—including treasurer, foreign affairs, defense, and trade—remain unchanged. Albanese is scheduled to attend the inauguration Mass of Pope Leo XIV in Rome on Sunday, where he will also meet with leaders such as European Commission President Ursula von der Leyen to discuss trade relations.
    • Easing global trade tensions have prompted investors to dial back expectations for aggressive interest rate cuts in Australia. Markets now project the Reserve Bank of Australia (RBA) to reduce the cash rate to approximately 3.1% by year-end, a revision from earlier forecasts of 2.85%. Nevertheless, the RBA is still widely expected to proceed with a 25 basis point cut at its upcoming policy meeting.

    Australian Dollar finds support around 0.6400 after breaking below nine-day EMA

    AUD/USD is hovering around 0.6410 on Friday. Technical analysis on the daily chart indicates a bearish bias, as the pair is trading below the nine-day Exponential Moving Average (EMA). However, the 14-day Relative Strength Index (RSI) remains above the 50 level, signaling that some bullish momentum persists despite the downside pressure.

    Immediate support lies at the psychological level of 0.6400, followed by the 50-day EMA around 0.6355. A decisive break below these levels could deteriorate the short- to medium-term outlook and pave the way for a deeper slide toward 0.5914 — a low last seen in March 2020.

    On the upside, resistance is seen at the nine-day EMA near 0.6417. A break above this could lead the pair to retest the six-month high of 0.6515, recorded on December 2, 2024. A sustained rally beyond that point may target the seven-month high of 0.6687 from November 2024.

    AUD/USD: Daily Chart

    Australian Dollar PRICE Today

    The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the strongest against the New Zealand Dollar.

    USD EUR GBP JPY CAD AUD NZD CHF
    USD -0.20% -0.09% -0.38% -0.06% -0.04% 0.07% -0.34%
    EUR 0.20% 0.11% -0.20% 0.13% 0.16% 0.26% -0.14%
    GBP 0.09% -0.11% -0.29% 0.03% 0.06% 0.16% -0.24%
    JPY 0.38% 0.20% 0.29% 0.33% 0.33% 0.42% 0.04%
    CAD 0.06% -0.13% -0.03% -0.33% 0.00% 0.13% -0.27%
    AUD 0.04% -0.16% -0.06% -0.33% -0.00% 0.11% -0.30%
    NZD -0.07% -0.26% -0.16% -0.42% -0.13% -0.11% -0.41%
    CHF 0.34% 0.14% 0.24% -0.04% 0.27% 0.30% 0.41%

    The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).

    Australian Dollar FAQs

    One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD.

    The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive.

    China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs.

    Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD.

    The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.



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  • Australian Dollar holds gains following Wage Price Index data release

    Australian Dollar holds gains following Wage Price Index data release


    • The Australian Dollar holds ground as the US Dollar weakened following softer-than-expected US inflation data.
    • Australia’s Wage Price Index rose by 0.9% QoQ in Q1, against the expected 0.8% increase.
    • US President Donald Trump described the relationship with China as excellent.

    The Australian Dollar (AUD) extends its gains against the US Dollar (USD) on Wednesday after registering more than 1.50% gains in the previous session. The AUD/USD pair strengthened as the US Dollar weakened following softer-than-expected US inflation data.

    Australia’s seasonally adjusted Wage Price Index rose by 3.4% year-over-year in Q4 2025, up from a 3.2% increase in Q4 2024 and surpassing market forecasts of a 3.2% gain. This marks a recovery from the prior quarter, which recorded the slowest wage growth since Q3 2022. On a quarterly basis, the index climbed 0.9% in Q1, surpassing the projected 0.8% rise.

    Australian Prime Minister Anthony Albanese was sworn in for a second term on Tuesday after a decisive election victory. Key cabinet positions—including treasurer, foreign affairs, defense, and trade—remain unchanged. Albanese is scheduled to attend the inauguration mass of Pope Leo XIV in Rome on Sunday, where he will also meet with leaders such as European Commission President Ursula von der Leyen to discuss trade relations.

    US President Donald Trump told Fox News that he is working to gain greater access to China, describing the relationship as excellent and expressing willingness to negotiate directly with President Xi on a potential deal.

    Easing global trade tensions have prompted investors to dial back expectations for aggressive interest rate cuts in Australia. Markets now project the Reserve Bank of Australia (RBA) to reduce the cash rate to approximately 3.1% by year-end, a revision from earlier forecasts of 2.85%. Nevertheless, the RBA is still widely expected to proceed with a 25 basis point cut at its upcoming policy meeting.

    Australian Dollar receives support as US Dollar struggles following softer inflation data

    • The US Dollar Index (DXY), which measures the US Dollar against a basket of six major currencies, is trading lower at around 100.90 at the time of writing. Traders await the US Producer Price Index (PPI) and the University of Michigan’s latest Consumer Sentiment Survey, which are set to be released later in the trading week.
    • US Consumer Price Index (CPI) rose by 2.3% year-over-year in April, slightly below the 2.4% increase recorded in March and market expectations of 2.4%. Core CPI—which excludes food and energy—also climbed 2.8% annually, matching both the previous figure and forecasts. On a monthly basis, both headline CPI and core CPI rose by 0.2% in April.
    • The US Dollar strengthened following news that the United States and China reached a preliminary agreement to significantly reduce tariffs after productive trade talks over the weekend in Switzerland. Under the deal, US tariffs on Chinese goods will be reduced from 145% to 30%, while China will lower its tariffs on US imports from 125% to 10%—a move broadly viewed as a major step toward de-escalating trade tensions.
    • After two days of negotiations aimed at easing trade tensions, both the US and China reported “substantial progress.” China’s Vice Premier He Lifeng described the talks as “an important first step” toward stabilizing bilateral relations.
    • Meanwhile, US Treasury Secretary Bessent and Trade Representative Greer called the discussions a constructive move toward narrowing the $400 billion trade imbalance. However, Greer warned later that if the agreement falls through, tariffs on Chinese goods could be reinstated.
    • China’s Consumer Price Index (CPI) declined for the third consecutive month in April, falling 0.1% year-on-year, matching both the market forecast and the drop recorded in March, according to data released Saturday by the National Bureau of Statistics. Meanwhile, the Producer Price Index (PPI) contracted 2.7% YoY in April, steeper than the 2.5% drop in March and below the market expectation of a 2.6% decline.
    • Australia’s Westpac Consumer Confidence Index rose 2.2% month-on-month to 92.1 in May, recovering from a 6.0% drop in the previous month and marking its third increase this year.
    • Australia’s Ai Group Industry Index showed improvement in April, although it marked the 33rd straight month of contraction—particularly driven by weakness in export-reliant manufacturing. These signs of persistent softness have strengthened market expectations that the Reserve Bank of Australia (RBA) may cut its cash rate by 25 basis points to 3.85% later this month.

    Australian Dollar could target 0.6500 barrier near six-month highs

    The AUD/USD pair is trading near 0.6470 on Wednesday. Technical analysis of the daily chart indicates a bullish outlook, with the pair trading above the nine-day Exponential Moving Average (EMA). Furthermore, the 14-day Relative Strength Index (RSI) has also surpassed the 50 mark, reinforcing the bullish sentiment.

    The AUD/USD pair could retest the six-month high of 0.6515, recorded on December 2, 2024. A sustained break above this level may pave the way for a move toward the seven-month high of 0.6687 from November 2024.

    On the downside, the AUD/USD pair is likely to test the nine-day EMA at 0.6433, followed by the 50-day EMA around 0.6353. A decisive break below these levels could weaken the short- and medium-term price momentum and open the door for a decline toward 0.5914, a level not seen since March 2020.

    AUD/USD: Daily Chart

    Australian Dollar PRICE Today

    The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the strongest against the US Dollar.

    USD EUR GBP JPY CAD AUD NZD CHF
    USD -0.11% -0.11% -0.26% -0.06% -0.12% -0.13% -0.14%
    EUR 0.11% 0.00% -0.20% 0.05% -0.01% -0.04% -0.03%
    GBP 0.11% -0.00% -0.22% 0.05% -0.02% -0.04% -0.03%
    JPY 0.26% 0.20% 0.22% 0.22% 0.16% 0.14% 0.14%
    CAD 0.06% -0.05% -0.05% -0.22% -0.07% -0.07% -0.07%
    AUD 0.12% 0.01% 0.02% -0.16% 0.07% -0.00% -0.01%
    NZD 0.13% 0.04% 0.04% -0.14% 0.07% 0.00% -0.01%
    CHF 0.14% 0.03% 0.03% -0.14% 0.07% 0.01% 0.00%

    The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).

    Economic Indicator

    Wage Price Index (QoQ)

    The Wage Price Index released by the Australian Bureau of Statistics is an indicator of labor cost inflation and of the tightness of labor markets. The Reserve Bank of Australia pays close attention to it when setting interest rates. A high reading is positive (or bullish) for the AUD, while a low reading is seen as negative (or bearish).


    Read more.



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  • Australian Dollar holds gains following Wage Price Index data release

    AUD/USD gathers strength above 0.6400 amid optimism in US-China trade talks


    • AUD/USD gains ground to near 0.6420 in Monday’s early Asian session.
    • China’s CPI fell for the third month amid ongoing economic struggles. 
    • The US and China cite progress in Geneva trade talks.

    The AUD/USD pair edges higher to around 0.6420 during the early Asian session on Monday. Optimism in US-China trade negotiations in Geneva, Switzerland, boosts the Australian Dollar (USD) against the Greenback. 

    China’s Consumer Price Index (CPI) fell for the third month in April as the country grapples with sluggish spending amid a fierce trade war with the US. Data released by the National Bureau of Statistics of China on Saturday showed that the CPI dropped by 0.1% YoY in April after declining 0.1% in March. The market consensus was for a 0.1% decrease in the reported period. Meanwhile, Producer Price Index (PPI) fell 2.7% YoY in April, compared to a 2.5% fall in March. The figure came in lower than the market consensus of -2.6%.  

    The US and China reported “substantial progress” after two days of talks in Switzerland aimed at de-escalating a trade war. China’s Vice Premier He Lifeng described trade talks with US officials as “an important first step” in stabilising bilateral trade relations, while US Treasury Secretary Scott Bessent said the two sides made “substantial progress.

    However, traders will keep an eye on the US-China trade talks in detail. The US would share details on Monday, and the positive developments could provide some support to the China-proxy Aussie, as China is a major trading partner of Australia. 

    Additionally, Chinese officials have eased key monetary policy tools in an attempt to boost domestic economic activity. These include an interest rate cut and a lowering of bank reserve requirements, both of which are intended to stimulate more lending. This, in turn, contributes to the Australian Dollar’s upside. 

    Australian Dollar FAQs

    One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD.

    The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive.

    China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs.

    Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD.

    The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.



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  • Australian Dollar under pressure as global trade and economic uncertainties persist

    Australian Dollar under pressure as global trade and economic uncertainties persist


    • The US Dollar holds steady as global trade negotiations remain in focus.
    • The PBoC continues Gold purchases, signaling long-term interest.
    • Chinese Copper production expands, reducing reliance on imports.

    The Australian Dollar (AUD) remains under pressure as global trade uncertainties persist, particularly surrounding the US-China trade talks. While there has been a slight rebound in copper production from China, trade deals and economic policies continue to impact sentiment in the market, with limited positive moves for the Aussie.

    Daily digest market movers: Aussie steady ahead of trade talks

    • The US Dollar (USD) holds steady as the market reacts to trade deal uncertainties and key upcoming data.
    • Copper production in China continues to expand, potentially reducing future copper imports.
    • Gold purchases by the People’s Bank of China (PBoC) have slowed, although purchases remain robust.
    • The US Dollar Index (DXY) remains near 100.30, showing signs of resistance despite trade deal headlines.
    • Trade talks between the US and China are scheduled for the weekend, raising hopes but also cautious expectations.
    • Despite a positive market reaction to the potential US-UK trade deal, the UK’s 10% tariff remains in place.
    • China’s crude oil imports increased, signaling continued demand despite global uncertainties.
    • Chile’s largest copper producer has raised its output, somewhat easing fears of a global shortage.
    • The PBoC’s Gold purchases rose by 70 thousand ounces, continuing their long-term strategy.
    • US Federal Reserve officials remain cautious, with no immediate interest rate cuts expected despite global trade tensions.
    • China’s economic outlook weighs heavily on commodity-linked currencies, including the Australian Dollar.
    • While China is expanding its domestic copper production, it could still face challenges from ongoing global supply issues.
    • Oil markets are tightening, with concerns about future import volumes, particularly from Iran.

    Technical Analysis

    The Australian Dollar is currently trading around 0.6400, up 0.30% on the day. The Relative Strength Index (RSI) at 54.85 suggests a neutral momentum, while the Moving Average Convergence Divergence (MACD) indicates a sell signal. Short-term moving averages, including the 20-day Simple Moving Average (SMA) at 0.6401, suggest a bullish outlook, supported by the 100-day SMA at 0.6289 and the 10-day Exponential Moving Average (EMA) at 0.6419. However, the 200-day SMA at 0.6460 indicates a bearish trend. Key support levels are at 0.6419, 0.6413, and 0.6401, with resistance at 0.6425, 0.6431, and 0.6460.

    Australian Dollar FAQs

    One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD.

    The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive.

    China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs.

    Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD.

    The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.



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  • Australian Dollar under pressure as global trade and economic uncertainties persist

    AUD/USD holds gains near 0.6400 following Chinese trade data


    • AUD/USD continues to face downward pressure amid stalled US-China trade negotiations.
    • Beijing is unlikely to ease tariffs ahead of the upcoming talks in Switzerland, fueling market uncertainty and weakening risk sentiment.
    • President Trump has announced a “major” trade deal with the United Kingdom, although key tariffs will stay at 10%.

    The AUD/USD pair recovers its daily losses, trading near 0.6400 during Friday’s Asian session, following China trade balance data. However, the Australian Dollar (AUD) remains under pressure due to stalled progress in US-China trade negotiations. Given the close economic ties between Australia and China, any pressure on the Chinese economy tends to weigh on the AUD.

    The trade balance came in at $96.18 billion, surpassing the expected $89 billion but slightly lower than the previous $102.63 billion. Exports grew by 8.1% year-on-year, beating the expected 1.9% but falling short of the prior 12.4%. Imports declined by 0.2% YoY, improving from the expected -5.9% and the previous -4.3%. Meanwhile, China’s trade surplus with the US for April stood at $20.46 billion, down from $27.6 billion in March.

    In Chinese Yuan (CNY) terms, it stood at CNY 689.99 billion, reflecting a modest decline from the previous month’s CNY 736.72 billion. Exports grew 9.3% year-on-year in April, compared to 13.5% in March. Imports increased by 0.8% YoY during the same period, reversing the previous decline of -3.5%.

    According to the Global Times, citing the Chinese Embassy in the United States, Beijing is unlikely to reduce tariffs ahead of the upcoming talks in Switzerland. This adds to market uncertainty and dampens risk sentiment.

    In the United States (US), President Donald Trump has adopted a firm stance on China’s trade policy, following the appointment of a new envoy to Beijing. While there are discussions around tariff exemptions, the administration appears cautious, with Trump stating that they are “not looking for so many exemptions.”

    Meanwhile, China is reportedly considering a significant change to its real estate market—banning the pre-sale of homes and allowing only completed properties to be sold. This move, aimed at stabilizing the property sector, is part of a broader reform plan still under development. The regulation would apply to future land sales, excluding public housing, and local governments would have flexibility in implementation.

    The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against a basket of currencies, is trading around 100.60, buoyed by strong US economic data and expectations of prolonged yield differentials. Initial optimism surrounding a US-UK trade agreement has faded, however, as it became clear that existing 10% tariffs will remain in place.

    Australian Dollar FAQs

    One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD.

    The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive.

    China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs.

    Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD.

    The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.



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  • Australian Dollar struggles as Trump administration plans to blacklist Chinese chipmakers

    AUD/USD flattens around 0.6420 as US Dollar struggles for more gains


    • AUD/USD wobbles around 0.6420 as the US Dollar struggles to extend its upside despite the Fed guiding no rush for interest rate cuts.
    • Fed Powell warns that risks to higher inflation and unemployment have risen.
    • Investors await US-China trade talks in Switzerland on Saturday.

    The AUD/USD pair trades flat around 0.6420 during North American trading hours on Thursday. The Aussie pair struggles for direction, while the US Dollar (USD) gives up initial gains.

    The US Dollar Index (DXY) rose to near 100.20 earlier in the day, on signals from the Federal Reserve (Fed) that monetary policy adjustments are not appropriate amid uncertainty over the United States (US) economic outlook under the leadership of President Donald Trump. However, the USD Index has flattened around 99.90 at the press time.

    The guidance from the Fed that there is no rush for interest rate cuts came after the central bank left them steady in the range of 4.25%-4.50% for the third meeting in a row.

    Fed Chair Jerome Powell warned that “risks to inflation and unemployment have skewed to the upside”. Powell said that tariffs so far are “significantly bigger-than-expected” and we will see “higher inflation and lower employment” if large increases in tariffs as announced are “sustained”.

    Meanwhile, investors look for trade discussions between the US and China, which are scheduled for Saturday in Switzerland. The meeting of US Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer with their Chinese counterparts aims to de-escalate the trade war, not to negotiate a trade deal. Tariffs and counter-tariffs imposed by both nations on each other are very high, and a trade deal cannot be initiated without lowering them.

    Any positive outcome from the US-China trade talks will be favorable for both the US and the Australian Dollar (AUD). Given that Australia is the leading trading partner of Beijing, an improvement in China’s economic outlook will strengthen the Aussie Dollar.

     

    US Dollar FAQs

    The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022.
    Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.

    The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates.
    When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.

    In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system.
    It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.

    Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.

     

     



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  • AUD/USD rises above 0.6500 following domestic data, US-China trade talks eyed

    AUD/USD rises above 0.6500 following domestic data, US-China trade talks eyed


    • AUD/USD gains ground following the release of domestic mid-tier economic data on Wednesday.
    • US Treasury Secretary Bessent and Trade Representative Greer are set to meet with Chinese Vice Premier He Lifeng in Geneva.
    • The Fed is expected to hold rates steady later in the North American session.

    The AUD/USD pair continues its upward momentum for the fourth consecutive session, hovering around the 0.6510 mark during Wednesday’s Asian trading hours. The Australian Dollar (AUD) finds support from releasing domestic mid-tier economic data and improving global trade sentiment.

    In April, the AiG Industry Index rose by 5.1 points to -15 on a seasonally adjusted basis, signaling modest improvement despite persistent headwinds in the industrial sector. Challenges such as global trade uncertainty, currency volatility, and the looming federal election continued to weigh on activity. Meanwhile, the AiG Manufacturing Purchasing Managers’ Index (PMI) climbed 3.0 points to -26.7, up from -29.7 in the previous month.

    Sentiment toward the AUD also improved as US-China trade tensions showed signs of easing. In a significant development, US Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer are set to meet with Chinese Vice Premier He Lifeng in Geneva over the weekend, marking the first high-level talks since the US imposed tariffs that escalated into a global trade dispute.

    China’s Ministry of Commerce stated that, after carefully evaluating US proposals and considering global expectations, national interests, and industry feedback, Beijing has agreed to engage in the upcoming negotiations.

    Looking ahead, investor attention is firmly on the Federal Reserve’s (Fed) rate decision later on Wednesday. While the Fed is widely expected to hold rates steady, markets will scrutinize comments from Fed Chair Jerome Powell for any hints of a potential pivot toward rate cuts in the near term.

    Australian Dollar FAQs

    One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD.

    The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive.

    China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs.

    Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD.

    The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.



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  • China’s Caixin Services PMI drops to 50.7 in April vs. 51.7 expected

    China’s Caixin Services PMI drops to 50.7 in April vs. 51.7 expected


    China’s Services Purchasing Managers’ Index (PMI) declined to 50.7 in April from 51.9 in March, the latest data published by Caixin showed on Tuesday.

    The data missed the market forecast of 51.7 in the reported period by a wide margin.

    AUD/USD reaction to China’s Services PMI

    The Chinese proxy, the Australian Dollar (AUD) remains deep in the red on the data release, with AUD/USD losing 0.30% on the day to trade at 0.6450 as of writing.

    Australian Dollar FAQs

    One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD.

    The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive.

    China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs.

    Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD.

    The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.



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  • AUD/USD holds steady above 0.6400 ahead of Chinese macro data

    FX option expiries for May 2 NY cut


    FX option expiries for May 2 NY cut at 10:00 Eastern Time via DTCC can be found below.

    EUR/USD: EUR amounts

    • 1.1150 1.6b
    • 1.1250 1b
    • 1.1300 726m
    • 1.1385 644m

    USD/JPY: USD amounts                                 

    • 144.25 594m
    • 145.00 830m
    • 146.00 1.5b
    • 147.50 1.6b

    USD/CHF: USD amounts     

    AUD/USD: AUD amounts

    • 0.6300 653m
    • 0.6450 894m
    • 0.6550 803m

    USD/CAD: USD amounts       

    • 1.3700 998m
    • 1.3825 834m
    • 1.3895 940m

    1.4000 778m



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