Tag: Macroeconomics

  • Senate Democrats’s Schumer says he will support GOP funding bill, likely avoiding shutdown

    Senate Democrats’s Schumer says he will support GOP funding bill, likely avoiding shutdown


    Senate Democratic Leader Chuck Schumer announced late Thursday that he plans to vote to keep the government open as the chamber prepares to take up a GOP stopgap bill continuing government funding Friday.  

    Key quotes

    I believe it is my job to make the best choice for the country, to minimize the harm to the American people. 

    Therefore, I will vote to keep the government open, and not shut it down.

    While the Republican bill is very bad, the potential for a shutdown has consequences for America that are much much worse. For sure, the Republican bill is a terrible option. 

    It is not a clean CR” or continuing resolution. 

    It is deeply partisan. It doesn’t address far too many of this country’s needs, but I believe allowing Donald Trump to take even much more power in a government shutdown is a far worse option.

    Trump has taken a blowtorch to our country and wielded chaos like a weapon. 

    For Donald Trump, a shutdown would be a gift. It would be the best distraction he could ask for from his awful agenda.

    Market reaction

    At the time of press, the US Dollar Index was down 0.03% on the day at 103.81. 

    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.

     



    Source link

  • NZD/USD extends its upside to near 0.5750, eyes on US PPI release

    NZD/USD extends its upside to near 0.5750, eyes on US PPI release


    • NZD/USD gains traction to around 0.5740 in Thursday’s early Asian session. 
    • Trump’s unpredictable announcements on tariffs undermine the US Dollar. 
    • China’s deflationary pressures might cap the upside for China-proxy Kiwi. 

    The NZD/USD pair extends its upside to around 0.5740 during the early Asian session on Thursday, bolstered by the weaker US Dollar (USD). The US Producer Price Index (PPI) will be the highlight later on Thursday, followed by the weekly Initial Jobless Claims.

    Worries over US President Donald Trump’s unpredictable trade policies have spread uncertainty among investors, weighing on the Greenback. Investors are worried about US weaker economic data as well as big cuts to the government workforce and government spending. Goldman Sachs analysts last week raised its recession chance from 15% to 20%, citing it saw policy changes as the key risk to the economy. 

    On the other hand, concerns over persistent deflationary pressures in China, New Zealand’s biggest export market, undermine the Kiwi. China’s Consumer Price Index (CPI) in February missed expectations and fell at the sharpest pace in 13 months, while producer price deflation persisted. 

    “China’s economy still faces deflationary pressure. While sentiment was improved by the developments in the technology space, domestic demand remains weak,” said Zhiwei Zhang, president and chief economist at Pinpoint Asset Management.

    New Zealand Dollar FAQs

    The New Zealand Dollar (NZD), also known as the Kiwi, is a well-known traded currency among investors. Its value is broadly determined by the health of the New Zealand economy and the country’s central bank policy. Still, there are some unique particularities that also can make NZD move. The performance of the Chinese economy tends to move the Kiwi because China is New Zealand’s biggest trading partner. Bad news for the Chinese economy likely means less New Zealand exports to the country, hitting the economy and thus its currency. Another factor moving NZD is dairy prices as the dairy industry is New Zealand’s main export. High dairy prices boost export income, contributing positively to the economy and thus to the NZD.

    The Reserve Bank of New Zealand (RBNZ) aims to achieve and maintain an inflation rate between 1% and 3% over the medium term, with a focus to keep it near the 2% mid-point. To this end, the bank sets an appropriate level of interest rates. When inflation is too high, the RBNZ will increase interest rates to cool the economy, but the move will also make bond yields higher, increasing investors’ appeal to invest in the country and thus boosting NZD. On the contrary, lower interest rates tend to weaken NZD. The so-called rate differential, or how rates in New Zealand are or are expected to be compared to the ones set by the US Federal Reserve, can also play a key role in moving the NZD/USD pair.

    Macroeconomic data releases in New Zealand are key to assess the state of the economy and can impact the New Zealand Dollar’s (NZD) valuation. A strong economy, based on high economic growth, low unemployment and high confidence is good for NZD. High economic growth attracts foreign investment and may encourage the Reserve Bank of New Zealand to increase interest rates, if this economic strength comes together with elevated inflation. Conversely, if economic data is weak, NZD is likely to depreciate.

    The New Zealand Dollar (NZD) tends to strengthen during risk-on periods, or when investors perceive that broader market risks are low and are optimistic about growth. This tends to lead to a more favorable outlook for commodities and so-called ‘commodity currencies’ such as the Kiwi. Conversely, NZD tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.

     



    Source link

  • US Dollar dives lower with German defense spending bill back on track

    US Dollar dives lower with German defense spending bill back on track


    • The US Dollar trades broadly in the red on Tuesday, devaluing further against most major peers.
    • The German Green coalition is said to be back on track for a defense spending bill. 
    • The US Dollar Index heads to the lower range of 103.00 and could break below it. 

    The US Dollar Index (DXY), which tracks the performance of the US Dollar (USD) against six major currencies, is eking out lows not seen since October 2024. The index trades above 103.50 at the time of writing on Tuesday. The Greenback faces headwinds on early European comments from the German green coalition, who said to be back on track for an agreement on a German defense spending bill. This pushes the US Dollar (USD) lower in favor of the Euro (EUR).

    On the economic data front, the US JOLTS Job Openings report for January will catch most of the attention. Traders are already spooked by recession fears, so a further decline in job openings could add to that conviction and see further downside momentum for the DXY. The US NFIB Business Optimism Index for February already released fell to 100.7, missing the 101 estimate and further down from the previous 102.8 reading. 

    Daily digest market movers: Some dots to connect

    • In the early European trading session, a headline was published that the German Green coalition leader said to be hopeful on a defense spending deal this week, Bloomberg reported. This news represents a 180-degree shift from the headline that triggered some US Dollar (USD) strength on Monday, where the Green Party was unwilling to support any defense spending deal. 
    • At 14:00, the US JOLTS Job Openings report for January will be published. Expectations are for an uptick to 7.75 million openings against the 7.6 million from December.
    • Equities are trying to brush off the doom and gloom from Monday. European equities are higher while US futures are in positive territory. 
    • The CME Fedwatch Tool projects a 95.0% chance for no interest rate changes in the upcoming Fed meeting on March 19. However, the chances of a rate cut at the May 7 meeting increase to 47.8% and to 89.9% at June’s meeting.
    • The US 10-year yield trades around 4.20%, off its near five-month low of 4.10% printed on Tuesday last week.

    US Dollar Index Technical Analysis: Not a one-day event

    The US Dollar Index (DXY) faces more selling pressure on Tuesday as recession fears are not going away. Traders remain concerned about tariffs’ impact and uncertainty on the US economy. Seeing the performance in US equities year-to-date, there is not much reason to be happy and no reason to support a stronger Dollar in the current narrative. 

    There is an upside risk at 104.00 for a firm rejection. If bulls can avoid that, look for a large sprint higher towards the 105.00 round level, with the 200-day Simple Moving Average (SMA) at 105.03. Once broken through that zone, a string of pivotal levels, such as 105.53 and 105.89, will present as caps. 

    On the downside, the  103.00 round level could be considered a bearish target in case US yields roll off again, with even 101.90 not unthinkable if markets further capitulate on their long-term US Dollar holdings. 

    US Dollar Index: Daily Chart

    US-China Trade War FAQs

    Generally speaking, a trade war is an economic conflict between two or more countries due to extreme protectionism on one end. It implies the creation of trade barriers, such as tariffs, which result in counter-barriers, escalating import costs, and hence the cost of living.

    An economic conflict between the United States (US) and China began early in 2018, when President Donald Trump set trade barriers on China, claiming unfair commercial practices and intellectual property theft from the Asian giant. China took retaliatory action, imposing tariffs on multiple US goods, such as automobiles and soybeans. Tensions escalated until the two countries signed the US-China Phase One trade deal in January 2020. The agreement required structural reforms and other changes to China’s economic and trade regime and pretended to restore stability and trust between the two nations. However, the Coronavirus pandemic took the focus out of the conflict. Yet, it is worth mentioning that President Joe Biden, who took office after Trump, kept tariffs in place and even added some additional levies.

    The return of Donald Trump to the White House as the 47th US President has sparked a fresh wave of tensions between the two countries. During the 2024 election campaign, Trump pledged to impose 60% tariffs on China once he returned to office, which he did on January 20, 2025. With Trump back, the US-China trade war is meant to resume where it was left, with tit-for-tat policies affecting the global economic landscape amid disruptions in global supply chains, resulting in a reduction in spending, particularly investment, and directly feeding into the Consumer Price Index inflation.

     



    Source link

  • Australian Dollar recovers recent losses as US Dollar struggles amid growth concerns

    Australian Dollar recovers recent losses as US Dollar struggles amid growth concerns


    • The Australian Dollar appreciates as the US Dollar faces challenges as concerns over tariff uncertainties deepen.
    • Westpac Consumer Confidence climbed 4% to 95.9 in March, up from 92.2 in February, reaching its highest level in three years.
    • President Trump described the economy as being in a “transition period,” signaling a potential slowdown.

    The Australian Dollar (AUD) appreciates against the US Dollar (USD) for the fourth consecutive session on Tuesday. However, the AUD/USD pair struggled, during early hours, despite a stronger Westpac Consumer Confidence reading—rising 4% to 95.9 in March from 92.2 in February, marking its highest level in three years. The uptick in sentiment was driven by the Reserve Bank of Australia’s (RBA) interest rate cut in February and easing cost-of-living pressures.

    Australia’s 10-year government bond yield declined to around 4.39% as escalating global trade tensions dampened investor risk appetite. China’s retaliatory tariffs on select United States (US) agricultural products took effect on Monday, following Washington’s recent tariff hike from 10% to 20% on Chinese imports. Given China’s status as Australia’s largest trading partner, these developments have weighed on market sentiment.

    Traders remain focused on the RBA’s policy outlook, especially after last week’s strong economic data tempered expectations of further rate cuts. Economic growth exceeded forecasts, marking its first acceleration in over a year. Additionally, the latest RBA Meeting Minutes signaled a cautious approach to monetary policy, clarifying that February’s rate cut does not imply a commitment to ongoing easing.

    With the Federal Reserve entering its blackout period ahead of the March 19 meeting, central bank commentary will be limited this week. Investors are now looking ahead to February’s Consumer Price Index (CPI) release on Wednesday for further insights into inflation trends.

    Australian Dollar faces challenges amid escalating global trade tensions

    • The US Dollar Index (DXY), which tracks the US Dollar against six major currencies, remains subdued for the sixth consecutive day and is trading around 103.80 at the time of writing. Concerns over tariff policy uncertainty potentially pushing the US economy into recession have weighed on the Greenback.
    • Weaker-than-expected US job data for February reinforced expectations that the Federal Reserve (Fed) will proceed with multiple rate cuts this year. According to LSEG data, traders are now pricing in a total of 75 basis points (bps) in rate cuts, with a June cut fully anticipated.
    • President Trump characterized the economy as being in a “transition period,” hinting at a potential slowdown. Investors took his remarks as an early signal of possible economic turbulence in the near future.
    • The US Bureau of Labor Statistics (BLS) showed on Friday that Nonfarm Payrolls (NFP) increased by 151,000 in February, falling short of the expected 160,000. January’s job growth was also revised downward to 125,000 from the previously reported 143,000.
    • Last week, Fed Chair Jerome Powell reassured markets that the central bank sees no immediate need to adjust monetary policy despite rising uncertainties. San Francisco Fed President Mary Daly echoed this sentiment, noting that increasing business uncertainty could dampen demand but does not justify an interest rate change.
    • US Commerce Secretary Howard Lutnick stated on Sunday that the 25% tariffs, imposed by President Donald Trump in February, on steel and aluminum imports, set to take effect on Wednesday, are unlikely to be postponed, according to Bloomberg. While US steelmakers have urged Trump to maintain the tariffs, businesses reliant on these materials may face increased costs.
    • President Trump stated on Sunday that he anticipates a positive outcome from the US discussions with Ukrainian officials in Saudi Arabia. Trump also mentioned that his administration has considered lifting an intelligence pause on Ukraine, is evaluating various aspects of tariffs on Russia, and is not worried about military exercises involving Russia, China, and Iran, according to Reuters.
    • RBA Deputy Governor Andrew Hauser highlighted that global trade uncertainty is at a 50-year high. Hauser warned that uncertainty stemming from US President Donald Trump’s tariffs could prompt businesses and households to delay planning and investment, potentially weighing on economic growth.
    • China announced on Saturday that it will impose a 100% tariff on Canadian rapeseed oil, oil cakes, and peas, along with a 25% levy on aquatic products and pork from Canada. The move comes as retaliation against tariffs introduced by Canada in October, escalating trade tensions. This marks a new front in a broader trade conflict driven by US President Donald Trump’s tariff policies. The tariffs are set to take effect on March 20.
    • China’s Consumer Price Index fell by 0.7% year-over-year in February, exceeding market expectations of a 0.5% decline and reversing the 0.5% increase recorded in the previous month. This marks the first instance of consumer deflation since January 2024, driven by weakening seasonal demand after the Spring Festival in late January. On a monthly basis, CPI inflation stood at -0.2% in February, down from January’s 0.7% and softer than the expected -0.1%.

    Technical Analysis: Australian Dollar falls to near 0.6250 as bearish momentum strengthens

    The AUD/USD pair is trading near 0.6260 on Tuesday, with technical analysis of the daily chart showing the pair slipping below the nine-day Exponential Moving Average (EMA), signaling weakening short-term momentum. Additionally, the 14-day Relative Strength Index (RSI) has fallen below 50, indicating a shift toward a bearish bias.

    On the downside, the AUD/USD pair could navigate the region around the five-week low of 0.6187, recorded on March 5.

    The nine-day EMA at 0.6288 serves as the immediate resistance for the AUD/USD pair, followed by the 50-day EMA at 0.6305. A break above this level could strengthen short-term momentum, potentially pushing the pair toward the three-month high of 0.6408, last reached on February 21.

    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   -0.19% -0.10% -0.18% -0.13% -0.04% 0.05% -0.28%
    EUR 0.19%   0.10% 0.02% 0.07% 0.16% 0.24% -0.08%
    GBP 0.10% -0.10%   -0.08% -0.04% 0.06% 0.15% -0.16%
    JPY 0.18% -0.02% 0.08%   0.05% 0.15% 0.22% -0.08%
    CAD 0.13% -0.07% 0.04% -0.05%   0.10% 0.18% -0.13%
    AUD 0.04% -0.16% -0.06% -0.15% -0.10%   0.09% -0.22%
    NZD -0.05% -0.24% -0.15% -0.22% -0.18% -0.09%   -0.31%
    CHF 0.28% 0.08% 0.16% 0.08% 0.13% 0.22% 0.31%  

    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.

     



    Source link

  • China’s Housing Minister said government to promote purchase of existing housing

    China’s Housing Minister said government to promote purchase of existing housing


    China’s Minister of Housing and Urban-Rural Development, Ni Hong, said on Sunday that the country’s property sector has shown positive change with market confidence improving. Hong further stated that the government will promote the purchase of existing housing and expand urban village renovation, per Reuters. 

    Key quotes

    Said that the country’s property market is showing signs of improvement.

    Growing confidence among buyers.

    Market continued its positive trajectory in January and February, stabilizing after previous declines.

    The government plans to encourage the purchase of existing homes and accelerate urban village redevelopment.

    Government will accelerate lending for ‘While List’ projects.

    Government will give more autonomy to local governments for affordable housing purchases.

    Local government special bonds to be used for purchasing idle land and housing stock.

    Market reaction  

    At the press time, the AUD/USD pair is down 0.11% on the day to trade at 0.6302. 

    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.

     



    Source link

  • US Dollar Index breaks below 104.00 as Treasury yields fall ahead of Nonfarm Payrolls

    US Dollar Index breaks below 104.00 as Treasury yields fall ahead of Nonfarm Payrolls


    • The US Dollar Index depreciates as market expectations grow for more aggressive Fed rate cuts amid US growth concerns.
    • President Trump exempted Mexican and Canadian goods under the USMCA from his proposed 25% tariffs.
    • The US Nonfarm Payrolls is projected to show job growth, with employment rising to 160K in February.

    The US Dollar Index (DXY), which tracks the US Dollar (USD) against six major currencies, continues its losing streak for the fifth consecutive day, pressured by declining US Treasury yields. Market expectations of more aggressive Federal Reserve (Fed) rate cuts amid concerns over US economic growth are contributing to the weakness. The DXY is trading around 103.90 with 2- and 10-year yields on US Treasury bonds standing at 3.94% and 4.24%, respectively, during the early European hours on Friday.

    Traders are closely watching global trade developments, particularly Canada’s decision to delay its second round of retaliatory tariffs on US products until April 2. This move follows US President Donald Trump’s exemption of Mexican and Canadian goods under the USMCA from his proposed 25% tariffs.

    On the labor market front, US Initial Jobless Claims for the week ending March 1 fell to 221K, down from 242K the previous week, according to the US Department of Labor (DOL). The figure came in below market expectations of 235K. Meanwhile, the upcoming US Non-Farm Payrolls (NFP) report is projected to show a modest rebound, with job additions expected to rise to 160K in February, up from 143K in January.

    Atlanta Fed President Raphael Bostic commented on Thursday that the US economy remains in a state of flux, making it difficult to predict future developments. Bostic reiterated the Fed’s commitment to bringing inflation down to 2% while minimizing labor market disruptions. He also stressed the importance of business sentiment in shaping monetary policy decisions.

    US Dollar PRICE Today

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

      USD EUR GBP JPY CAD AUD NZD CHF
    USD   -0.31% -0.10% -0.12% 0.04% 0.46% 0.35% -0.25%
    EUR 0.31%   0.20% 0.21% 0.35% 0.78% 0.67% 0.06%
    GBP 0.10% -0.20%   0.00% 0.14% 0.57% 0.46% -0.11%
    JPY 0.12% -0.21% 0.00%   0.17% 0.60% 0.49% -0.08%
    CAD -0.04% -0.35% -0.14% -0.17%   0.42% 0.32% -0.25%
    AUD -0.46% -0.78% -0.57% -0.60% -0.42%   -0.10% -0.66%
    NZD -0.35% -0.67% -0.46% -0.49% -0.32% 0.10%   -0.56%
    CHF 0.25% -0.06% 0.11% 0.08% 0.25% 0.66% 0.56%  

    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 US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

     



    Source link

  • EUR/JPY extends upside above 161.00 ahead of ECB rate decision

    EUR/JPY extends upside above 161.00 ahead of ECB rate decision


    • UR/JPY gains momentum to near 161.15 in Thursday’s early European session.
    • The concerns over tariff risks on Japan might contribute to the JPY.
    • The ECB is anticipated to cut interest rates at the March meeting on Thursday.

    The EUR/JPY cross extends the rally to around 161.15 during the early European session. The Japanese Yen (JPY) weakens against the Euro (EUR) amid the risk-on mood after US President Donald Trump will delay Canada and Mexico tariffs on autos for one month.

    The White House announced a one-month delay for US automakers to comply with the US-Mexico-Canada Agreement from the tariffs imposed on Mexico and Canada. White House spokesperson Karoline Leavitt also said that Trump was “open” to extra tariff exemptions beyond the pause on auto levies. This, in turn, boost investors’ appetite for riskier assets and drags the safe-haven currency like the Japanese Yen lower.

    The growing concerns over tariff risks in Japan might contribute to the JPY’s downside. US President Donald Trump said that Japan and China are keeping their currencies down, signaling that he may impose fresh tariffs on imports if this does not stop.

    However, the upside for the cross might be limited amid rising speculation of further hike from the Bank of Japan (BoJ). The BoJ is widely anticipated to continue hiking this year, supported by improving economic conditions, rising prices, and stronger wage growth, which align with the Japanese central bank’s policy normalization efforts.

    On the Euro front, the European Central Bank (ECB) is expected to cut interest rates for the second time this year at its March meeting on Thursday. The markets are now fully priced in a quarter-point rate cut for the March meeting, taking the ECB’s key rate to 2.5% . A further reduction to 2% by the end of the year was also priced in.

    ECB FAQs

    The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy for the region. The ECB primary mandate is to maintain price stability, which means keeping inflation at around 2%. Its primary tool for achieving this is by raising or lowering interest rates. Relatively high interest rates will usually result in a stronger Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.

    In extreme situations, the European Central Bank can enact a policy tool called Quantitative Easing. QE is the process by which the ECB prints Euros and uses them to buy assets – usually government or corporate bonds – from banks and other financial institutions. QE usually results in a weaker Euro. QE is a last resort when simply lowering interest rates is unlikely to achieve the objective of price stability. The ECB used it during the Great Financial Crisis in 2009-11, in 2015 when inflation remained stubbornly low, as well as during the covid pandemic.

    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 European Central Bank (ECB) purchases government and corporate bonds from financial institutions to provide them with liquidity, in QT the ECB stops buying more bonds, and stops reinvesting the principal maturing on the bonds it already holds. It is usually positive (or bullish) for the Euro.

     

     



    Source link

  • Australia’s Trade Surplus increases to 5,620M MoM in January vs. 5,500M expected

    Australia’s Trade Surplus increases to 5,620M MoM in January vs. 5,500M expected


    Australia’s trade surplus increased to 5,620M MoM in January versus 5,500M expected and 4,924M (revised from 5,085M) in the previous reading, according to the latest foreign trade data published by the Australian Bureau of Statistics on Thursday.

    Further details reveal that Australia’s Exports rose by 1.3% MoM in January from 1.2% (revised from 1.1%) seen a month earlier. Meanwhile, Imports declined by 0.3% MoM in January, compared to 5.9% seen in December.  

    Market reaction to Australia’s Trade Balance

    At the press time, the AUD/USD pair is down 0.08% on the day to trade at 0.6335.

    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.

     



    Source link

  • Gold soars as investors flock to safety on trade and geopolitical uncertainty

    Gold soars as investors flock to safety on trade and geopolitical uncertainty


    • XAU/USD climbs to $2,888 as markets brace for tariffs, weaker US growth
    • Gold snaps a two-day losing streak as risk-off sentiment drives safe-haven flows.
    • Trump’s tariff threats, clash with Zelenskyy fuel market uncertainty.
    • Atlanta Fed GDP Now forecast plunges to -2.8%, boosts Gold’s appeal.

    Gold price is rallying over 1% on Monday, snapping two days of losses as the Greenback gets battered due to safe-haven demand and falling United States (US) Treasury bond yields. Geopolitical tensions and tariff threats by US President Donald Trump increased demand for the safety appeal of Bullion. XAU/USD trades at $2,888 at the time of writing.

    Risk appetite deteriorated following the clash between US President Donald Trump and Ukrainian President Volodymir Zelenskyy last Friday. In the meantime, tariffs imposed on Mexico, Canada and China are expected to kick in on Tuesday.

    Data-wise, business activity in the manufacturing sector in February was mixed, with S&P Global improving, while the ISM dipped but continued to expand.

    In the meantime, the last round of US economic data pushed the Atlanta GDP Now Q1 2025 forecast model further deep into negative territory from -1.6% on February 28 to -2.8% as of writing.

    Source: GDPNow

    Therefore, traders seeking safety bought Bullion pushing prices on the way towards $2,900. The US 10-year Treasury note falls two basis points (bps) down to 4.176% levels last seen in December 2024.

    Alongside the data, St. Louis Fed President Alberto Musalem said the economic outlook is for continued solid economic growth, but recent data pose some downside risks.

    Daily digest market movers: Gold price surges amid pessimistic US economic outlook

    • US real yields, as measured by the yield in the US 10-year Treasury Inflation-Protected Securities (TIPS), tumble almost three bps to 1.808%.
    • The US ISM Manufacturing PMI for February held steady at 50.3, slightly down from 50.9 and below the 50.5 forecast, indicating a mild slowdown in business activity.
    • S&P Global Manufacturing PMI showed improvement, rising to 52.7 from 51.2, surpassing expectations of 51.6, signaling continued expansion in the sector.
    • Money markets had priced in that the Federal Reserve (Fed) would ease policy by 71 basis points (bps), up from 58 bps last week, revealed data from Prime Market Terminal.

    Source: Prime Market Terminal

    XAU/USD technical outlook: Gold price advances towards $2,900

    Gold price uptrend resumed after two days of losses that drove XAU/USD below the $2,900 figure. Nevertheless, buyers stepped in near the $2,830 mark, lifting spot prices above $2,850, which exacerbated the rally toward $2,893. If buyers achieve a daily close above $2,900, bullion could be poised to challenge the year-to-date (YTD) peak at $2,954.

    Otherwise, on further weakness, XAU/USD could aim toward the February 14 low of $2,877, followed by the February 12 swing low of $2,864. However, the broader uptrend remains intact unless XAU/USD drops below $2,800.

    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.

     



    Source link

  • USD/INR loses traction on likely RBI intervention

    USD/INR loses traction on likely RBI intervention


    • The Indian Rupee gains traction in Monday’s early European session. 
    • Foreign exchange intervention from the RBI might help limit the INR’s losses. 
    • India’s HSBC Manufacturing PMI and US ISM Manufacturing PMI will take center stage later on Monday. 

    The Indian Rupee (INR) gathers strength on Monday. The potential intervention from the Reserve Bank of India (RBI) could provide some support to the local currency. On the other hand, the latest tariff rounds from US President Donald Trump on Canada, Mexico, and potentially China could boost the US Dollar (USD) and exert some selling pressure on the INR. Additionally, a recovery in crude oil prices could drag the Indian Rupee lower as India is the world’s third-largest oil consumer. 

    Looking ahead, traders will keep an eye on India’s HSBC Manufacturing Purchasing Managers Index (PMI) for February, which will be published later on Monday. On the US docket, the ISM Manufacturing PMI will be released. 

    Indian Rupee rebounds despite Trump’s tariff threats

    • “Markets continue to live with the uncertainty and whiplash of the multitude of tariff proposals in the pipeline,” said MUFG Bank. 
    • India’s real Gross Domestic Product (GDP) grew 6.2% YoY in the fourth quarter (Q4) of 2024, compared to a 5.6% growth (revised from 5.4%) recorded in the previous quarter, according to data released by the National Statistical Office (NSO) on Friday. This figure came in weaker than the 6.3% expected. 
    • The US Personal Consumption Expenditures (PCE) Price Index increased 0.3% in January, in line with expectations, the US Bureau of Economic Analysis showed on Friday. 
    • The US PCE Price Index climbed 2.5% YoY in January, compared to 2.6% in December. The core PCE Price Index, which excludes volatile food and energy prices, climbed 2.6% YoY in January, down from 2.9% in December. Both figures came in line with the market consensus. 

    USD/INR sticks to positive bias in the longer term

    The Indian Rupee trades in negative territory. The bullish outlook of the USD/INR pair prevails, with the price being well-supported above the key 100-day Exponential Moving Average (EMA) on the daily timeframe. Further upside looks favorable as the 14-day Relative Strength Index (RSI) is located above the midline near 63.75. 

    The first upside barrier for USD/INR emerges at 87.53, the high of February 28. A bullish candlestick breaking above this level could lift the pair to an all-time high near 88.00 then 88.50. 

    On the flip side, the initial support level for the pair is seen in the 87.05-87.00 zone, representing the low of February 27 and the round mark. A breach of the mentioned level could drag USD/INR to the next bearish targets at 86.48, the low of February 21, followed by 86.14, the low of January 27. 

     



    Source link

  • Australian Dollar recovers recent losses as US Dollar struggles amid growth concerns

    Australian Dollar holds gains following China Manufacturing PMI data


    • The Australian Dollar gains ground following the TD-MI Inflation Gauge, and China Manufacturing PMI data released on Monday.
    • China’s Caixin Manufacturing PMI increased to 50.8 in February from January’s 50.1.
    • The US Dollar struggles as US PCE inflation data aligns with expectations, easing concerns over unexpected US inflation spikes.

    The Australian Dollar (AUD) halted its six-day losing streak on Monday, buoyed by a weaker US Dollar (USD) following the release of January’s Personal Consumption Expenditures (PCE) inflation data on Friday. The report aligned with expectations, easing fears of unexpected inflation spikes in the US.

    Australia’s TD-MI Inflation Gauge fell by 0.2% month-over-month in February, reversing a 0.1% rise in January. This marked the first decline since last August and followed the Reserve Bank of Australia’s (RBA) decision to cut its cash rate by 25 basis points to 4.1% during its first monetary policy meeting of the year, reflecting a continued slowdown in underlying inflation. However, on an annual basis, the gauge rose by 2.2%, slightly below the previous 2.3% increase.

    The AUD also receives upward support from upbeat Chinese economic data. China’s Caixin Manufacturing Purchasing Managers’ Index (PMI) rose to 50.8 in February from January’s 50.1, exceeding market expectations of 50.3. Given China’s role as a key trading partner for Australia, the stronger PMI reading provided a boost to the Australian Dollar.

    However, the AUD’s upside could be limited by escalating US-China trade tensions. Over the weekend, US President Donald Trump announced an additional 10% tariff on Chinese imports starting Tuesday, adding to the 10% tariff imposed last month. On Thursday, Trump stated on Truth Social that 25% tariffs on Canadian and Mexican goods will take effect on March 4.

    Australian Dollar appreciates as concerns over unexpected US inflation ease

    • The US Dollar Index (DXY), which tracks the USD against six major currencies, weakens after three consecutive sessions of gains, hovering around 107.30 at the time of writing. The downside of the Greenback could be limited as US Treasury yields improve, with 2-year and 10-year Treasury yields currently standing at 4.02% and 4.24%, respectively.
    • The US PCE inflation report met expectations, with the monthly headline PCE holding steady at 0.3%. Core PCE rose slightly to 0.3% from December’s 0.2%, while the annual headline PCE stood at 2.6%, slightly exceeding projections but unchanged from December’s figure. Core PCE eased to 2.6%, down from a revised 2.9% in December.
    • Tensions escalated between US President Donald Trump and Ukrainian leader Volodymyr Zelenskyy during peace deal negotiations. Zelenskyy was expected to sign an agreement granting the US greater access to Ukraine’s rare earth minerals and participate in a joint press conference, but the plan was abandoned after a heated exchange between the leaders in front of the media. Following the confrontation, in which Trump openly expressed his disdain, top advisers asked Zelenskyy to leave the White House.
    • President Trump signed a memorandum on Friday instructing the Committee on Foreign Investment in the United States (CFIUS) to limit Chinese investments in strategic sectors. Reuters cited a White House official saying that the national security memorandum seeks to encourage foreign investment while safeguarding US national security interests from potential threats posed by foreign adversaries like China.
    • The S&P Global Australia Manufacturing Purchasing Managers Index (PMI) was revised down to 50.4 in February from an initial estimate of 50.6 but remained above January’s 50.2. This marked the second consecutive month of improvement in manufacturing conditions and the strongest growth since February 2023.
    • China’s NBS Manufacturing PMI improved to 50.2 in February versus 49.1 prior. This figure came in stronger than the 49.9 expected. Meanwhile, the NBS Non-Manufacturing PMI climbed to 50.4 in February from 50.2 in January, beating the estimation of 50.3.
    • According to a Wall Street Journal report on the Australian Dollar’s outlook from the Commonwealth Bank of Australia (CBA), heightened trade war risks driven by Trump have become a major concern. China’s response to these trade threats will be a key factor shaping the future performance of the AUD.

    Australian Dollar tests 0.6200 support amid prevailing bearish bias

    The AUD/USD pair is trading around 0.6220 on Monday. The daily chart analysis suggests that the pair remains under pressure, trading below the nine- and 14-day Exponential Moving Averages (EMAs), indicating weakening short-term momentum. Additionally, the 14-day Relative Strength Index (RSI) remains below 50, reinforcing the bearish outlook.

    On the downside, the AUD/USD pair is currently testing key support at the psychological level of 0.6200. A break below this level could drive the price toward 0.6087, its lowest point since April 2020, recorded on February 3.

    The initial resistance is seen at the nine-day EMA of 0.6280, followed by the 14-day EMA at 0.6290. A decisive break above these levels could strengthen short-term momentum, potentially leading the pair to retest the three-month high of 0.6408, reached on February 21.

    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   -0.44% -0.27% -0.15% -0.10% -0.35% -0.21% -0.12%
    EUR 0.44%   0.06% 0.06% 0.15% -0.01% 0.04% 0.14%
    GBP 0.27% -0.06%   0.13% 0.09% -0.07% -0.02% 0.08%
    JPY 0.15% -0.06% -0.13%   0.26% -0.15% -0.02% 0.03%
    CAD 0.10% -0.15% -0.09% -0.26%   -0.09% -0.11% -0.01%
    AUD 0.35% 0.01% 0.07% 0.15% 0.09%   0.05% 0.15%
    NZD 0.21% -0.04% 0.02% 0.02% 0.11% -0.05%   0.10%
    CHF 0.12% -0.14% -0.08% -0.03% 0.00% -0.15% -0.10%  

    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

    Caixin Manufacturing PMI

    The Caixin Manufacturing Purchasing Managers Index (PMI), released on a monthly basis by Caixin Insight Group and S&P Global, is a leading indicator gauging business activity in China’s manufacturing sector. The data is derived from surveys of senior executives at both private-sector and state-owned companies. Survey responses reflect the change, if any, in the current month compared to the previous month and can anticipate changing trends in official data series such as Gross Domestic Product (GDP), industrial production, employment and inflation.The index varies between 0 and 100, with levels of 50.0 signaling no change over the previous month. A reading above 50 indicates that the manufacturing economy is generally expanding, a bullish sign for the Renminbi (CNY). Meanwhile, a reading below 50 signals that activity among goods producers is generally declining, which is seen as bearish for CNY.

    Read more.

    Last release: Mon Mar 03, 2025 01:45

    Frequency: Monthly

    Actual: 50.8

    Consensus: 50.3

    Previous: 50.1

    Source: IHS Markit

     



    Source link

  • Blaze erupts at Ufa oil refinery amid explosion reports

    Blaze erupts at Ufa oil refinery amid explosion reports


    An oil refinery in the Russian city of Ufa was on fire, according to the state RIA news agency. The regional branch of Russia’s emergency ministry reported that residents in nearby areas face no danger from the blaze, per Reuters. 

    “There is no threat to residents of nearby areas,” said RIA.

    The cause of the fire is yet to be determined. Several Russian Telegram channels, including the SHOT news channel, reported the fire followed an explosion at the refinery. 

    Market reaction

    At the time of writing, the Gold price (XAU/USD) is trading around $2,870, up 0.58% on the day. 

    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.

     



    Source link

  • Japan’s economy is on a moderate recovery path

    Japan’s economy is on a moderate recovery path


    Bank of Japan Deputy Governor Shinichi Uchida said on Friday that Japan’s economy is experiencing a moderate recovery, though some weaknesses persist.

    Key quotes

    Japan’s economy is experiencing a moderate recovery, though some weaknesses persist.
    The underlying inflation rate is gradually rising toward the 2% target.
    The Bank of Japan’s JGB holdings continue to provide a strong monetary easing effect.

    Market reaction 

    At the time of writing, the USD/JPY pair is trading 0.07% higher on the day to trade at 149.78.

    Bank of Japan FAQs

    The Bank of Japan (BoJ) is the Japanese central bank, which sets monetary policy in the country. Its mandate is to issue banknotes and carry out currency and monetary control to ensure price stability, which means an inflation target of around 2%.

    The Bank of Japan embarked in an ultra-loose monetary policy in 2013 in order to stimulate the economy and fuel inflation amid a low-inflationary environment. The bank’s policy is based on Quantitative and Qualitative Easing (QQE), or printing notes to buy assets such as government or corporate bonds to provide liquidity. In 2016, the bank doubled down on its strategy and further loosened policy by first introducing negative interest rates and then directly controlling the yield of its 10-year government bonds. In March 2024, the BoJ lifted interest rates, effectively retreating from the ultra-loose monetary policy stance.

    The Bank’s massive stimulus caused the Yen to depreciate against its main currency peers. This process exacerbated in 2022 and 2023 due to an increasing policy divergence between the Bank of Japan and other main central banks, which opted to increase interest rates sharply to fight decades-high levels of inflation. The BoJ’s policy led to a widening differential with other currencies, dragging down the value of the Yen. This trend partly reversed in 2024, when the BoJ decided to abandon its ultra-loose policy stance.

    A weaker Yen and the spike in global energy prices led to an increase in Japanese inflation, which exceeded the BoJ’s 2% target. The prospect of rising salaries in the country – a key element fuelling inflation – also contributed to the move.

     



    Source link

  • Australian Dollar appreciates despite a disappointing Q4 Private Capital Expenditure

    Australian Dollar appreciates despite a disappointing Q4 Private Capital Expenditure


    • The Australian Dollar holds gains after the release of a weaker-than-expected Private Capital Expenditure on Thursday.
    • Australia’s Private Capital Expenditure unexpectedly contracted by 0.2% QoQ in Q4 2024, falling short of market expectations for 0.8% growth.
    • The US Dollar continues to strengthen as traders evaluate the economy’s performance and the outlook on tariffs.

    The Australian Dollar (AUD) holds gains against the US Dollar (USD) on Thursday. The AUD/USD pair gains ground despite the release of disappointing Australia’s Private Capital Expenditure, which unexpectedly shrank by 0.2% quarter-on-quarter in the fourth quarter of 2024, missing market expectations of 0.8% growth and after an upwardly revised 1.6% expansion in the previous quarter.

    Reserve Bank of Australia (RBA) Deputy Governor Andrew Hauser said he expects more positive news on inflation but emphasized the importance of seeing this progress materialize first. He noted that the tightness in Australia’s labor market remains a challenge for controlling inflation.

    The AUD also faced challenges on Wednesday following Australia’s monthly Consumer Price Index (CPI), which rose by 2.5% year-over-year in January, compared to a 2.5% increase seen in December. The market forecast was for 2.6% growth in the reported period.

    The AUD/USD pair faces challenges due to rising risk sentiment as US President Donald Trump said late Monday that sweeping US tariffs on imports from Canada and Mexico “will go forward” when a month-long delay on their implementation expires next week. Moreover, the Trump administration is aiming to tighten chip export controls on China, Australia’s close trading partner.

    However, the downside of the AUD/USD pair could be limited as the People’s Bank of China (PBOC) injected CNY300 billion on Tuesday via the one-year Medium-term Lending Facility (MLF), maintaining the rate at 2%. Additionally, the PBOC injected CNY318.5 billion through seven-day reverse repos at 1.50%, consistent with the prior rate.

    Australian Dollar could depreciate due to increased risk aversion

    • The US Dollar Index (DXY), which measures the USD against six major currencies, gains ground as traders assess the strength of the economy and tariff outlook. The DXY extends its gains to near 106.50 at the time of writing.
    • Federal Reserve Bank of Atlanta President Raphael Bostic said late Wednesday that the Fed should hold interest rates where they are, at a level that continues to put downward pressure on inflation, per Bloomberg.
    • The White House said late Wednesday that US President Donald Trump issued an executive order aimed at implementing the Department of Government Efficiency’s (DOGE) cost-cutting drive, per Reuters. The executive order requires agencies to justify spending, limit travel, and identify surplus federal properties that can be sold.
    • President Trump signed a memorandum on Friday instructing the Committee on Foreign Investment in the United States (CFIUS) to limit Chinese investments in strategic sectors. Reuters cited a White House official saying that the national security memorandum seeks to encourage foreign investment while safeguarding US national security interests from potential threats posed by foreign adversaries like China.
    • The Reserve Bank of Australia (RBA) lowered its Official Cash Rate (OCR) by 25 basis points to 4.10% last week—the first rate cut in four years. Reserve Bank of Australia (RBA) Governor Michele Bullock acknowledged the impact of high interest rates but cautioned that it was too soon to declare victory over inflation. She also emphasized the labor market’s strength and clarified that future rate cuts are not guaranteed, despite market expectations.

    Australian Dollar tests 0.6300 support as a bearish bias emerges

    The AUD/USD pair hovers around 0.6300 on Thursday. Analysis of the daily chart indicates that the pair stays below the nine- and 14-day Exponential Moving Averages (EMAs), signaling weakening short-term price momentum. Moreover, the 14-day Relative Strength Index (RSI) remains below 50, reinforcing the prevailing bearish outlook.

    The AUD/USD pair tests immediate support at the psychological level of 0.6300. A break below this threshold could push the pair toward the 0.6087 region, its lowest level since April 2020, recorded on February 3.

    On the upside, the AUD/USD pair may face immediate resistance at the 14-day EMA of 0.6323, followed by the nine-day EMA at 0.6329. A decisive break above these levels could strengthen short-term price momentum, paving the way for the pair to challenge the two-month high of 0.6408, reached on February 21.

    AUD/USD: Daily Chart

    (This story was corrected on February 27 at 02:15 GMT to say, in the first paragraph, that “The Australian Dollar (AUD) holds gains against the US Dollar (USD) on Thursday,” not Wednesday.)

    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 Swiss Franc.

      USD EUR GBP JPY CAD AUD NZD CHF
    USD   0.05% 0.04% 0.07% 0.00% -0.15% -0.06% 0.10%
    EUR -0.05%   -0.00% 0.03% -0.04% -0.19% -0.10% 0.05%
    GBP -0.04% 0.00%   0.06% -0.04% -0.19% -0.10% 0.05%
    JPY -0.07% -0.03% -0.06%   -0.09% -0.24% -0.18% 0.00%
    CAD -0.00% 0.04% 0.04% 0.09%   -0.14% -0.06% 0.09%
    AUD 0.15% 0.19% 0.19% 0.24% 0.14%   0.09% 0.24%
    NZD 0.06% 0.10% 0.10% 0.18% 0.06% -0.09%   0.16%
    CHF -0.10% -0.05% -0.05% -0.00% -0.09% -0.24% -0.16%  

    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

    Private Capital Expenditure

    The Private Capital Expenditure released by the Australian Bureau of Statistics measures current and future capital expenditure intentions of the private sector. It is considered as an indicator for inflationary pressures. A high reading is seen as positive (or bullish) for the AUD, while a low reading is seen as negative (or bearish).

    Read more.

     



    Source link

  • Australian Dollar declines as US Dollar attempts to recover recent losses

    Australian Dollar declines as US Dollar attempts to recover recent losses


    • The Australian Dollar remains tepid following the release of the monthly Consumer Price Index.
    • China’s International Trade Representative and Vice Minister of Commerce met with US business leaders to discuss tariffs.
    • The Trump administration considers tightening chip export controls on China.

    The Australian Dollar (AUD) remains subdued against the US Dollar (USD) for the fourth consecutive day on Wednesday. The AUD/USD pair remains under pressure after Australia’s monthly Consumer Price Index (CPI) showed a 2.5% year-over-year rise in January, matching December’s increase. This fell short of market expectations for 2.6% growth.

    China’s Commerce Ministry announced on Wednesday that the country’s International Trade Representative and Vice Minister of Commerce, Wang Shouwen, met with US business leaders. The discussions focused primarily on tariffs, though no further details were disclosed.

    A Bloomberg report early Tuesday revealed that the Trump administration plans to tighten chip export controls on China, a key trading partner of Australia. The US is reportedly considering stricter restrictions on Nvidia chip exports and may introduce additional limitations on Chinese companies such as SMIC and CXMT.

    The AUD/USD pair struggles amid growing risk sentiment after US President Donald Trump stated late Monday that broad US tariffs on imports from Canada and Mexico “will go forward” once the month-long implementation delay ends next week. Trump asserted that the US has “been taken advantage of” by foreign countries and reaffirmed his intention to impose so-called reciprocal tariffs.

    Australian Dollar depreciates amid increased risk aversion

    • The US Dollar Index (DXY), which measures the USD against six major currencies, falls to near 106.00 with 2-year and 10-year yields on US Treasury bonds declining to 4.09% and 4.28%, respectively, at the time of writing.
    • Federal Reserve Bank of Chicago President Austan Goolsbee remarked on Monday that the US central bank needs greater clarity before considering interest rate cuts.
    • The US Composite PMI fell to 50.4 in February, down from 52.7 in the previous month. In contrast, the Manufacturing PMI rose to 51.6 in February from 51.2 in January, surpassing the forecast of 51.5. Meanwhile, the Services PMI declined to 49.7 in February from 52.9 in January, falling short of the expected 53.0.
    • US Initial Jobless Claims for the week ending February 14 rose to 219,000, exceeding the expected 215,000. Meanwhile, Continuing Jobless Claims increased to 1.869 million, slightly below the forecast of 1.87 million.
    • President Trump signed a memorandum on Friday instructing the Committee on Foreign Investment in the United States (CFIUS) to limit Chinese investments in strategic sectors. Reuters cited a White House official saying that the national security memorandum seeks to encourage foreign investment while safeguarding US national security interests from potential threats posed by foreign adversaries like China.
    • China released its annual policy statement for 2025 on Sunday. The statement details strategies to advance rural reforms and promote comprehensive rural revitalization. Additionally, China’s state-supported developers are aggressively increasing land purchases at premium prices, driven by the government’s relaxation of home price restrictions to revitalize the troubled property market.
    • The People’s Bank of China (PBOC) injected CNY300 billion on Tuesday via the one-year Medium-term Lending Facility (MLF), maintaining the rate at 2%. Additionally, the PBOC injected CNY318.5 billion through seven-day reverse repos at 1.50%, consistent with the prior rate.
    • The Reserve Bank of Australia (RBA) lowered its Official Cash Rate (OCR) by 25 basis points to 4.10% last week—the first rate cut in four years. Reserve Bank of Australia (RBA) Governor Michele Bullock acknowledged the impact of high interest rates but cautioned that it was too soon to declare victory over inflation. She also emphasized the labor market’s strength and clarified that future rate cuts are not guaranteed, despite market expectations.

    Australian Dollar moves toward 14-day EMA barrier after breaking below 0.6350

    AUD/USD trades near 0.6340 on Wednesday, breaking below the ascending channel that reflects a weakening bullish market bias. However, the 14-day Relative Strength Index (RSI) remains above 50, supporting the positive outlook is still in play.

    On the upside, the AUD/USD pair tests the immediate barrier at a nine-day Exponential Moving Average (EMA) of 0.6342. A successful break above this level could improve the short-term price momentum and support the pair in testing the key psychological resistance at 0.6400, with the next hurdle at the ascending channel’s upper boundary around 0.6450.

    The AUD/USD pair tests immediate support at the 14-day EMA of 0.6331. A decisive break below this level could cause the emergence of the bearish bias and lead the pair to test the psychological level of 0.6300.

    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   0.09% 0.11% 0.36% 0.04% 0.18% 0.11% 0.07%
    EUR -0.09%   0.03% 0.27% -0.06% 0.09% 0.02% -0.02%
    GBP -0.11% -0.03%   0.23% -0.08% 0.06% -0.00% -0.04%
    JPY -0.36% -0.27% -0.23%   -0.32% -0.18% -0.26% -0.28%
    CAD -0.04% 0.06% 0.08% 0.32%   0.14% 0.08% 0.05%
    AUD -0.18% -0.09% -0.06% 0.18% -0.14%   -0.05% -0.09%
    NZD -0.11% -0.02% 0.00% 0.26% -0.08% 0.05%   -0.04%
    CHF -0.07% 0.02% 0.04% 0.28% -0.05% 0.09% 0.04%  

    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.

     



    Source link

  • US Dollar dives lower with German defense spending bill back on track

    US Dollar Index flat on Monday’s geopolitical wild ride with DOGE, G7 meeting ahead of President Trump’s speech


    • The US Dollar steadies after an earlier wild ride as a flood of geopolitical news erupts this Monday.
    • In Germany, the far-right AfD party is outpaced by the CDU. 
    • The US Dollar Index (DXY) has recovered a near 0.50% loss andd trades marginally higher at the time of writing.

    The US Dollar Index (DXY), which tracks the performance of the US Dollar (USD) against six major currencies, has completely recovered Asian losses in the US trading session this Monday. The initial move down in the US Dollar came in, due to euphoria for the Euro (EUR) after the first German election results showed a firm lead for the Christian Democratic Union of Germany (CDU), which will take the lead in forming a coalition. As the dust settles, this means that fundamentally, no big changes will take place in Germany regarding leadership and political agenda, which triggers the Euro to pare back gains and the DXY to turn flat to positive. 

    Meanwhile US headlines have been added where several US departments such as the Pentagon have asked employees not to go ahead with the request from Elon Musk and DOGE (Department of Government Efficiency) to disclose their duties. Elon Musk meanwhile issued warnings on Twitter that those who fail to comply coming into the office or reporting back to DOGE, will be put on leave. 

    In an ongoing G7 meeting, the group is unable to agree on a joint statement to mark the three year since Russia invaded Ukraine, due to disagreements between the US and its European allies. The US opposed language condemning Moscow and a call for more energy sanctions, and has threatened to pull support for a statement altogether, although discussions are ongoing.

    The US economic calendar starts off the week slowly, with all eyes on the US Gross Domestic Product (GDP) release for the fourth quarter of 2024 on Thursday and Personal Consumption Expenditures (PCE) for January on Friday. However, the Chicago Fed National Activity Index for January is due this Monday. Later in the day, United States (US) President Donald Trump is also due to deliver a speech. 

    Daily digest market movers: Not impressed

    • The Euro (EUR) has given up all its gains against the US Dollar (USD) as traders are not impressed with the possible lack of major reforms or changes in the German political landscape for the new government formation.
    • The Chicago Fed National Activity Index for January came in at -0.03, a small loss compared to the previous 0.15 reading.
    • The US Treasury will auction a 3-month, 6-month Bills, and a 2-year Note auction this Monday.
    • US President Donald Trump is set to hold a press conference with President of France Macron near 19:00 GMT. 
    • Equities are having a sigh of relief after the German election outcome, though the German Dax is fading its intraday gains at the start of the US trading session. The broader pan-European Stoxx 50 index is even turning negative after the US opening bell. 
    • The CME FedWatch tool shows a 41.2% chance that interest rates will remain unchanged at current levels in June against a bigger 46.2% for a 25 basis points (bps) rate cut. 
    • The US 10-year yield trades around 4.43%, down over 3% from last week’s high at 4.574%.

    US Dollar Index Technical Analysis: It is bound to move

    The US Dollar Index (DXY) portrays a textbook element here, with the German election outcome as a catalyst. During the Asian session, a sigh of relief and support for the Euro was outpacing the Greenback in the idea that a crisis was averted with the Far-Right not having enough seats to secure the lead in Germany. However, now that the dust settles, markets start to realise that the current coalition probability is dull and the same politics markets saw in the past few decades is due, which is seen as not enough to trigger substantial additional upside in Euro.

    On the upside, the 100-day Simple Moving Average (SMA) could limit bulls buying the Greenback near 106.61. From there, the next leg could go up to 107.35, a pivotal support from December 2024 and January 2025. In case US President Trump has some surprise comments on Monday, even 107.96 (55-day SMA) could be tested. 

    On the downside, the 106.52 (April 16, 2024, high) level has seen a false break for now. However, that does mean quite a few stops might have been triggered in the markets, with a few bulls having been washed out of their long US Dollar positions. Another leg lower might be needed to entice those Dollar bulls to reenter at lower levels, near 105.89 or even 105.33.

    US Dollar Index: Daily Chart

    Fed FAQs

    Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.

    The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.

    In extreme situations, the Federal Reserve may resort to a policy named 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 during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.

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

     



    Source link

  • Australian Dollar rises as Chinese developers buy land at premium

    Australian Dollar rises as Chinese developers buy land at premium


    • The Australian Dollar advanced as the Chinese government announced its annual policy statement for 2025 on Sunday.
    • The AUD struggled as Trump instructed the Committee on Foreign Investment to limit Chinese investments in the US.
    • The US Dollar struggles following the downbeat US economic data released last week.

    The Australian Dollar (AUD) retraces its recent losses from the previous session on Monday following the Chinese government’s release of its annual policy statement for 2025 on Sunday. The statement details strategies to advance rural reforms and promote comprehensive rural revitalization. Optimism around China’s stimulus plans could strengthen the AUD, given China’s role as a key trading partner for Australia.

    China’s state-supported developers are aggressively increasing land purchases at premium prices, driven by the government’s relaxation of home price restrictions aimed at revitalizing the troubled property market. In 2025 so far, 37% of land sales have closed at prices 20% or more above the asking price — a sharp rise from 14% in 2024 and just 4.6% in 2023, according to the China Index Academy.

    The AUD/USD pair faced challenges as President Donald Trump signed a memorandum on Friday instructing the Committee on Foreign Investment in the United States (US) to limit Chinese investments in strategic sectors. Reuters cited a White House official saying that the national security memorandum seeks to encourage foreign investment while safeguarding US national security interests from potential threats posed by foreign adversaries like China.

    The Reserve Bank of Australia (RBA) lowered its Official Cash Rate (OCR) by 25 basis points to 4.10% last week—the first rate cut in four years. Reserve Bank of Australia (RBA) Governor Michele Bullock acknowledged the impact of high interest rates but cautioned that it was too soon to declare victory over inflation. She also emphasized the labor market’s strength and clarified that future rate cuts are not guaranteed, despite market expectations.

    Australian Dollar strengthens as the US Dollar falters amid disappointing economic data

    • The US Dollar Index (DXY), which measures the USD against six major currencies, depreciates below 106.50 at the time of writing. The DXY faced challenges following the downbeat US economic data including Jobless Claims S&P Global Purchasing Managers’ Index (PMI) released last week.
    • The US Composite PMI fell to 50.4 in February, down from 52.7 in the previous month. In contrast, the Manufacturing PMI rose to 51.6 in February from 51.2 in January, surpassing the forecast of 51.5. Meanwhile, the Services PMI declined to 49.7 in February from 52.9 in January, falling short of the expected 53.0.
    • US Initial Jobless Claims for the week ending February 14 rose to 219,000, exceeding the expected 215,000. Meanwhile, Continuing Jobless Claims increased to 1.869 million, slightly below the forecast of 1.87 million.
    • Federal Reserve Board Governor Adriana Kugler stated on Thursday that US inflation still has “some way to go” before reaching the central bank’s 2% target, noting that the path remains uncertain, according to Reuters.
    • St. Louis Fed President Alberto Musalem cautioned about potential stagflation risks and rising inflation expectations. Meanwhile, Atlanta Fed President Raphael Bostic kept the possibility of two rate cuts this year open, contingent on economic developments.
    • President Trump indicated that a new trade deal with China is possible and expects Chinese President Xi Jinping to visit. He also mentioned discussions with China regarding TikTok and noted that his administration is considering a 25% tariff on lumber and forest products.
    • The latest Federal Open Market Committee (FOMC) Meeting Minutes reaffirmed the decision to keep interest rates unchanged in January. Policymakers emphasized the need for more time to assess economic activity, labor market trends, and inflation before considering any rate adjustments. The committee also agreed that clear signs of declining inflation are necessary before implementing rate cuts.
    • President Trump has confirmed that a 25% tariff on pharmaceutical and semiconductor imports will take effect in April. Additionally, he reaffirmed that auto tariffs will remain at 25%, further escalating global trade tensions.
    • Australia’s Judo Bank Manufacturing PMI rose to 50.6 in February, up from 50.2 in January. The Services PMI improved to 51.4 from 51.2, while the Composite PMI edged up to 51.2 from 51.1.
    • The Australian Bureau of Statistics (ABS) reported on Thursday that Australia’s seasonally adjusted Unemployment Rate rose to 4.1% in January from 4.0% in December, aligning with market expectations. Additionally, Employment Change came in at 44K for January, down from a revised 60K in December (previously 56.3K), but still exceeding the consensus forecast of 20K.
    • Reserve Bank of Australia (RBA) Deputy Governor Andrew Hauser stated while speaking to Bloomberg News last week that the central bank’s policy “is still restrictive.” Hauser noted that the latest jobs data showed little cause for concern.

    Australian Dollar could test 0.6350 support near nine-day EMA

    AUD/USD trades near 0.6370 on Monday, moving within an ascending channel that reflects bullish market sentiment. The 14-day Relative Strength Index (RSI) stays above 50, supporting the positive outlook.

    On the upside, the AUD/USD pair could challenge the key psychological resistance at 0.6400, with the next hurdle at the ascending channel’s upper boundary around 0.6430.

    The AUD/USD pair could find immediate support at the nine-day Exponential Moving Average (EMA) of 0.6347, followed by the 14-day EMA at 0.6330. A stronger support zone aligns with the channel’s lower boundary near 0.6320.

    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   -0.42% -0.28% -0.07% -0.14% -0.13% -0.07% -0.15%
    EUR 0.42%   0.06% 0.17% 0.10% 0.29% 0.17% 0.10%
    GBP 0.28% -0.06%   0.17% 0.04% 0.23% 0.12% 0.04%
    JPY 0.07% -0.17% -0.17%   -0.06% 0.04% 0.10% 0.02%
    CAD 0.14% -0.10% -0.04% 0.06%   -0.04% 0.08% 0.00%
    AUD 0.13% -0.29% -0.23% -0.04% 0.04%   -0.11% -0.18%
    NZD 0.07% -0.17% -0.12% -0.10% -0.08% 0.11%   -0.07%
    CHF 0.15% -0.10% -0.04% -0.02% -0.00% 0.18% 0.07%  

    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.

     



    Source link