- The AUD/USD faces offers about 0.6400 waiting for the preliminary data of the US PMI of the USA Global for February.
- Investors see Trump’s tariff agenda as less fearsome than anticipated.
- Bulock’s support from the RBA to maintain a cautious posture on interest rate cuts.
The Aud/USD pair faces sales pressure around 0.6400 at the negotiation hours of North America on Friday. The Aussie torque weakens while the US dollar (USD) is firmly negotiated before the publication of the preliminary index of purchasing managers (PMI) of the United States Global S&P (USA) at 14:45 GMT.
The dollar index (DXY), which follows the value of the dollar against six main currencies, rises to 106.75 after recovering from the minimum of the year (YTD) of 106.30, which registered Thursday.
The PMI preliminary report is expected to show that the general business activity expanded at a faster rate due to strong performance in the manufacturing sector as well as in the service sector. It is estimated that the manufacturing PMI and the PMI of services have expanded at a faster rate up to 51.5 and 53.0, respectively.
Positive PMI data of the private sector would indicate a strong economic perspective. Such a scenario would force Federal Reserve officials (FED) to continue maintaining a restrictive monetary policy position.
However, the perspective of the US dollar remains uncertain since investors expect the tariff agenda of the US president, Donald Trump, to be less fearsome. Until now, the level of tariffs imposed by Trump is significantly lower than he promised in the electoral campaign. Although Trump has proposed tariffs for a series of articles, investors expect their allies to negotiate with him and that the impact on the global economy is much lower than anticipated.
Meanwhile, the Australian dollar (AUD) weakens in front of its main peers, except the Japanese Yen (JPY), despite the fact that the governor of the Bank of the Australian Reserve (RBA), Michele Bullock, reiterated her position of maintaining caution on greater monetary expansion. Bullock warned that the disinflation trend could stagnate if the RBA cuts interest rates too fast.
Australian dollar Price today
The lower table shows the percentage of change of the Australian dollar (AUD) compared to the main currencies today. Australian dollar was the strongest currency against the Japanese yen.
| USD | EUR | GBP | JPY | CAD | Aud | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.26% | 0.21% | 0.48% | 0.07% | 0.30% | 0.16% | 0.25% | |
| EUR | -0.26% | -0.06% | 0.22% | -0.20% | 0.03% | -0.11% | -0.02% | |
| GBP | -0.21% | 0.06% | 0.29% | -0.14% | 0.09% | -0.05% | 0.04% | |
| JPY | -0.48% | -0.22% | -0.29% | -0.38% | -0.17% | -0.33% | -0.23% | |
| CAD | -0.07% | 0.20% | 0.14% | 0.38% | 0.22% | 0.08% | 0.17% | |
| Aud | -0.30% | -0.03% | -0.09% | 0.17% | -0.22% | -0.14% | -0.06% | |
| NZD | -0.16% | 0.11% | 0.05% | 0.33% | -0.08% | 0.14% | 0.09% | |
| CHF | -0.25% | 0.02% | -0.04% | 0.23% | -0.17% | 0.06% | -0.09% |
The heat map shows the percentage changes of the main currencies. The base currency is selected from the left column, while the contribution currency is selected in the upper row. For example, if you choose the Australian dollar of the left column and move along the horizontal line to the US dollar, the percentage change shown in the box will represent the Aud (base)/USD (quotation).
In the Front of Economic Data, the PMI composed of the Judo Bank of Australia expanded at a slightly faster rate, reaching 51.2 from 51.1 in January. The PMI of Services advanced to 51.4 from 51.2, while the manufacturing PMI rose to 50.6 from the previous reading of 50.2.
Faqs Australian dollar
One of the most important factors for the Australian dollar (Aud) is the level of interest rates set by the Australian Reserve Bank (RBA). Since Australia is a country rich in resources, another key factor is the price of its greatest export, iron mineral. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and commercial balance. The feeling of the market, that is, if investors are committed to more risky assets (Risk-on) or seek safe shelters (Risk-Off), it is also a factor, being the positive risk-on for the AUD.
The Australian Reserve Bank (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 the interest rates of the economy as a whole. The main objective of the RBA is to maintain a stable inflation rate of 2% -3% by adjusting the interest rates or the low. Relatively high interest rates compared to other large central banks support the AU, and the opposite for the relatively low. The RBA can also use relaxation and quantitative hardening to influence credit conditions, being the first refusal for the AU and the second positive for the AUD.
China is Australia’s largest commercial partner, so the health of the Chinese economy greatly influences the value of the Australian dollar (Aud). When the Chinese economy goes well, it buys more raw materials, goods and services in Australia, which increases the demand of the AU and makes its value upload. The opposite occurs when the Chinese economy does not grow as fast as expected. Therefore, positive or negative surprises in Chinese growth data usually have a direct impact on the Australian dollar.
Iron mineral is the largest export in Australia, with 118,000 million dollars a year according to data from 2021, China being its main destination. The price of iron ore, therefore, can be a driver of the Australian dollar. Usually, if the price of iron ore rises, the Aud also does, since the aggregate demand of the currency increases. The opposite occurs when the price of low iron ore. The highest prices of the iron mineral also tend to lead to a greater probability of a positive commercial balance for Australia, which is also positive for the AUD.
The commercial balance, which is the difference between what a country earns with its exports and what it pays for its imports, is another factor that can influence the value of the Australian dollar. If Australia produces highly requested exports, its currency will gain value exclusively for the excess demand created by foreign buyers who wish to acquire their exports to what you spend on buying imports. Therefore, a positive net trade balance strengthens the AUD, with the opposite effect if the commercial balance is negative.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
