- The Australian dollar fights while the feeling of risk aversion intensifies due to the growing commercial tensions between the US and China.
- The PMI composed of the Judo Bank of Australia rose to 51.1 in January from 50.2 in December, pointing out a modest expansion.
- Daly of the Fed declared that the Central Bank remains in a waiting and observation position, emphasizing the impact of economic uncertainty on policy formulation.
The Australian dollar (AUD) lowers against the US dollar (USD) in the midst of greater risk aversion after the increase in fears on commercial tensions between the US and China. The Aud/USD torque failed to receive support from the improved purchasing managers index (PMI) of the Judo Bank published on Wednesday.
The PMI composed of the Judo Bank of Australia rose to 51.1 in January from 50.2 in December, reflecting a modest growth in private sector activity. Meanwhile, the Judo Bank services PMI rose to 51.2 from 50.8, marking the twelfth consecutive month of expansion in the services sector. Although the growth was moderate, it was the strongest since August.
The audience could be further depreciated at the greatest probability that the Bank of the Australian Reserve (RBA) considers a rate cut in February. The RBA has maintained the official cash (OCR) rate at 4.35% since November 2023, emphasizing that inflation must “sustainably” return to its target range of 2% -3% before any flexibility of politics.
The Australian dollar faces challenges since market volatility remains a concern while investors closely observe the current commercial war between the United States (USA) and China, Australia’s main trading partner. China retaliates against the new 10% tariff of the US that entered into force on Tuesday. However, Trump declared Monday afternoon that he would probably talk to China within the next 24 hours. He also warned, “if we cannot reach an agreement with China, the tariffs will be very, very substantial.”
The Australian dollar remains under pressure in a greater risk aversion
- The US dollar index (DXY), which measures the value of the dollar against six main currencies, remains under pressure down for the third consecutive day, quoting around 108.00 at the time of writing. Meanwhile, operators are preparing for non -agricultural payroll data (NFP) on Friday, which is expected to mark the direction of the monetary policy of the Federal Reserve (Fed).
- President Trump has agreed for a 30 -day suspension of the 25% proposed tariffs on Canadian and Mexican imports. This decision occurs after Canadian Prime Minister Justin Trudeau and Mexican president Claudia Sheinbaum committed to improve border security measures to address concerns about illegal immigration and drug trafficking.
- The China Ministry of Commerce announced that it will impose a 15% tariff on the imports of liquefied coal and natural gas (LNG) of the US, together with an additional 10% tariff on crude oil, agricultural equipment and certain cars . In addition, to “safeguard national security interests,” China is implementing export controls on Tungsten, Telurio, Ruthenium, Molybdenum and related products.
- According to the Financial Times, Chinese exporters are intensifying their efforts to move production abroad in response to Trump tariffs. Manufacturers in China are accelerating plans to relocate production in other countries, including those of the Middle East, to avoid US tariff .
- The White House announced Monday night that US President Donald Trump signed an executive order to initiate an investment fund owned by the government, according to Reuters. This fund could allow the US to benefit from Tiktok if an American buyer is secured. Tiktok has until early April to find an approved partner or buyer. Trump is pressing so that the US acquires a 50% participation in the company.
- Jolts employment offers fell to 7.6 million in December, not reaching the estimate of consensus of 8 million. The US labor market remains stable with a total of separations without significant changes in 5.3 million in December.
- The Fedwatch of the CME tool projects an 86% probability that the Fed maintains the rates without changes in its March meeting.
- The president of the Bank of the Fed of San Francisco, Mary Daly, declared on Tuesday that the Central Bank remains in a waiting and observation position, emphasizing the impact of economic uncertainty in the formulation of policies. Although the economy is working well and maintaining the impulse, uncertainty persists. As a result, the Fed has the flexibility to carefully evaluate the data before making adjustments in the policy.
Technical analysis: The Australian dollar breaks above the nine -day Ema and the descending channel
The Aud/USD pair quotes about 0.6250 on Wednesday, staying above the descending channel pattern in the daily chart, indicating a possible upward change. The 14 -day relative force (RSI) index is located at level 50, reflecting a neutral momentum. A sustained breakdown above 50 in the RSI could confirm a stronger bullish trend.
Upwards, the AUD/USD torque could explore the area around its maximum of seven weeks at level 0.6330, registered on January 24.
The Aud/USD torque could find immediate support in the nine -day exponential mobile average (EMA) about 0.6240, followed by the upper limit of the descending channel. A decline to the channel would reinforce the bearish bias, potentially leading to the torque towards the lower limit of the descending channel around 0.6140.
AUD/USD: Daily graphic
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 weakest currency against the Japanese yen.
| USD | EUR | GBP | JPY | CAD | Aud | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.03% | 0.04% | -0.45% | 0.03% | 0.09% | -0.08% | 0.03% | |
| EUR | -0.03% | 0.00% | -0.45% | -0.01% | 0.06% | -0.12% | -0.00% | |
| GBP | -0.04% | -0.01% | -0.48% | -0.01% | 0.05% | -0.12% | -0.01% | |
| JPY | 0.45% | 0.45% | 0.48% | 0.46% | 0.53% | 0.34% | 0.47% | |
| CAD | -0.03% | 0.01% | 0.01% | -0.46% | 0.07% | -0.11% | 0.00% | |
| Aud | -0.09% | -0.06% | -0.05% | -0.53% | -0.07% | -0.18% | -0.06% | |
| NZD | 0.08% | 0.12% | 0.12% | -0.34% | 0.11% | 0.18% | 0.12% | |
| CHF | -0.03% | 0.00% | 0.00% | -0.47% | -0.01% | 0.06% | -0.12% |
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).
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.
