- The Aud/USD collapses about 0.6235 while the Australian dollar subrinds in front of its peers.
- RBA is expected to maintain stable interest rates at 4.1% on Tuesday.
- The US dollar rises before April 2, when the US president will announce planned reciprocal rates.
The Aud/USD torque collapses about 0.6235 in the American session on Monday, the lowest level seen in more than three weeks. The Australian dollar (Aud) subrinds in front of its peers in general before the monetary policy meeting of the Bank of the Australian Reserve (RBA) on Tuesday.
Investors expect the RBA to maintain its official cash (OCR) rate at the current levels of 4.1%. Therefore, investors will pay special attention to the monetary policy orientation of the RBA.
Meanwhile, caution among market participants before the so -called “Liberation Day” on Wednesday, when the president of the United States (USA) Donald Trump will announce reciprocal rates, the appeal of the Australian dollar (Aud) has decreased. Investors expect Trump’s rates to have a significant impact on Chinese economic perspectives, since the second largest nation in the world has the largest commercial surplus against the United States.
The new escalation of uncertainty about Chinese economic perspectives weighs on the Australian dollar, given Australia’s strong dependence on its exports to China.
During the negotiation hours in North America, the US dollar (USD) advances after recovering intradic losses. The dollar index (DXY), which follows the value of the dollar against six main currencies, bounces about 104.20 after registering a new minimum of 10 days around 103.75 earlier in the day.
The Aud/USD breaks below the ascending limit of the graphic pattern of ascending triangle around 0.6275 in the daily temporal framework, which is drawn from the minimum of February, 0.6087. The horizontal resistance of the aforementioned graphic pattern is placed from the maximum of February 21, 0.6408. An ascending triangle formation indicates a contraction of volatility, but expands significantly after a break.
The 20 -day exponential mobile average (EMA) is negotiated higher than 0.6290, suggesting a downward trend.
The 14 -day relative force (RSI) index falls about 40.00. A new bearish impulse would be triggered if the RSI falls below it.
More falls would appear if the pair breaks below the minimum of March 4, 0.6187 towards the minimum of February, 0.6087, followed by the psychological support of 0.6000.
On the other hand, a sustained movement above the maximum of March 18, 0.6390 will open the doors to the maximum of December 5, 0.6456 and the round level resistance of 0.6500.
Aud/USD Daily Graph
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.
