- The Australian dollar was strengthened after Trump exempts key technological products – including some from China – of its new “reciprocal” tariffs.
- The minutes of the RBA meeting indicated uncertainty about the time of the next movement of interest rates.
- The US dollar is trying to stabilize while investors weigh the increase in concerns on stagflation.
The Australian dollar (AUD) is strengthened by fifth consecutive session against the US dollar (USD) on Tuesday. The Aud/USD continued to gain impulse after the US president, Donald Trump, exempts key technological products from his new “reciprocal” tariffs, raising the feeling of global risk.
Exemptions cover items produced largely in China, such as smartphones, computers, semiconductors, solar cells and flat screens, which offers an impulse to the AU, since China remains the largest commercial partner in Australia and an important consumer of its basic products.
The minutes of the Bank of the Australian Reserve Bank (RBA) from March 31 to April 1 suggested that the time of the next movement of interest rates remains uncertain. While the Board said that the May meeting would be an appropriate time to reassess the policy, it emphasized that no default decision had been made.
The members recognized that global uncertainty, particularly around US tariffs, could significantly affect perspectives. The Board also highlighted both risks up and down for the Australian economy and inflation.
The 10 -year Australian government bond performance fell to approximately 4.33%. Although the Australian Reserve Bank (RBA) maintained interest rates without changes this month, adopted a more moderate tone about future cuts, pointing out a decrease in underlying inflation. The markets are currently considering a 25 basic points cut in May and anticipate around 120 basic relaxation points over the year.
The Australian dollar can be seen due to the erosion of investors confidence in US assets
- The American dollar index (DXY), which measures the USD compared to a basket of six main currencies, rose slightly after reaching its lowest level since 2022. The DXY is negotiating around 99.90 and tries to stabilize while investors respond to the growing signs of risks of staggration.
- The president of the Fed of Atlanta, Raphael Bostic, commented during the Morning market session in the morning that the US Central Bank still has a long way to go to achieve its inflation target of 2%, which generates doubts about market expectations for additional cuts of interest rates.
- The feeling index of the University of Michigan fell to 50.8 in April, while the expectations of inflation at one year shot at 6.7%. The US Producer Price Index (IPP) increased a 2.7% year -on -year in March, lowering 3.2% in February, with the underlying rate decreasing to 3.3%. Unemployment requests increased to 223,000, although continuous requests fell to 1.85 million, indicating a mixed image in the labor market.
- On Sunday, the president of the Federal Reserve of Minneapolis, Neel Kashkari, said in Face the Nation of CBS that the economic repercussions of Trump’s commercial war would depend largely on how quickly trade uncertainties are resolved. “This is the biggest blow to the confidence that I can remember in the 10 years that I have been in the Fed, except in March 2020 when Covid hit for the first time,” said Kashkari.
- The growing commercial tensions between the US and China have revived concerns about a possible global economic slowdown. On Friday, China’s Ministry of Finance announced a drastic increase in tariffs on US goods, raising them from 84% to 125%. This action occurred in response to the previous movement of President Trump to increase tariffs on Chinese imports to 145%.
- The US consumer price index (CPI) was reduced to 2.4% year -on -year in March, lowering 2.8% in February and below the market forecast of 2.6%. The underlying IPC, which excludes food and energy prices, increased by 2.8% annually, compared to the previous 3.1% and without reaching the 3.0% estimate. In monthly terms, the general CPI fell 0.1%, while the underlying CPC rose 0.1%.
- The minutes of the last meeting of the Federal Open Market Committee (FOMC) suggested that those responsible for policies are almost unanimous in recognizing the double challenge of increasing inflation and slow growth, warning that the Federal Reserve faces “difficult compensation” in the coming months.
- The Commercial Balance of China for March, measured in Chinese yuan (CNY), registered a substantial increase to CNY 736.72 billion, a drastic increase from CNY 122 billion in the previous month. In terms of US dollars (USD), the commercial surplus also exceeded expectations, reaching 102.6 billion dollars, well above the 77 billion provision, although lower than the previous one of 170.51 billion.
- China exports increased by 13.5% year -on -year in March, accelerating from 3.4% in February, while imports fell 3.5% interannual, a lower fall compared to the contraction of 7.3% previously reported.
- The General Administration of Customs of China recognized the challenges facing the exports of the country, qualifying the current external environment of “complex and severe”. Despite this, the officials expressed confidence, stating that “heaven will not fall.” They reported a solid start of the year, with foreign trade showing growth both in volume and quality. The agency also emphasized China’s commitment to enforce all necessary measures to counteract US actions and maintain their sovereignty and national security.
- The Popular Bank of China (PBOC) is expected to implement a greater monetary relaxation in the second quarter of 2025. This includes a possible cut of 15 basic points in the preferential interest rate for loans (LPR) and a minimum reduction of 25 basic points in the reserve requirement rate (RRR). According to CITI analysts, cited in a Reuters report, there is a growing probability that internal stimulus measures will be accelerated in response to increasing external pressures.
The Australian dollar rises to about 0.6350 due to persistent bullish bias
The Aud/USD is negotiated near the 0.6340 mark on Tuesday, with technical indicators in the daily graphic pointing to a bullish bias. The torque remains above the exponential mobile socks (EMA) of nine and 50 days, while the 14 -day relative force index (RSI) has exceeded the neutral level of 50, reinforcing the positive impulse.
Upwards, the aud/USD torque could point to psychological resistance at 0.6400, followed by the maximum of four months of 0.6408.
The immediate support is observed in the 50 -day EMA around 0.6270, with an additional support in the nine -day EMA about 0.6240. A decisive breakdown below these levels could undermine the upward structure in the short term, opening the door to a greater fall towards the area of ​​0.5914 – his lowest level since March 2020 – and the key psychological level of 0.5900.
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 strongest currency against the Swiss Franco.
| USD | EUR | GBP | JPY | CAD | Aud | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.14% | 0.04% | 0.13% | 0.08% | -0.26% | -0.39% | 0.28% | |
| EUR | -0.14% | -0.10% | 0.02% | -0.05% | -0.33% | -0.53% | 0.16% | |
| GBP | -0.04% | 0.10% | 0.11% | 0.04% | -0.22% | -0.43% | 0.26% | |
| JPY | -0.13% | -0.02% | -0.11% | -0.07% | -0.37% | -0.67% | 0.13% | |
| CAD | -0.08% | 0.05% | -0.04% | 0.07% | -0.30% | -0.47% | 0.21% | |
| Aud | 0.26% | 0.33% | 0.22% | 0.37% | 0.30% | -0.20% | 0.48% | |
| NZD | 0.39% | 0.53% | 0.43% | 0.67% | 0.47% | 0.20% | 0.69% | |
| CHF | -0.28% | -0.16% | -0.26% | -0.13% | -0.21% | -0.48% | -0.69% |
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.
