- The Australian dollar remains under pressure among the expectations that the RBA will provide another reduction in the 25-union rate in May.
- The Chinese Foreign Minister Wang Yi emphasized that dialogue is necessary to solve US-Chin trade tensions.
- The American dollar fought because of the weakened trust of investors resulting from the unpredictable trade policy of Trump.
The Australian dollar (AUD) has less than on Tuesday after registration of over 0.50% of profits in relation to the US dollar (USD) in the previous session. The Aud/USD pair is absorbed when the American dollar appreciates in connection with the alleviation of global trade tensions.
US President Donald Trump signaled openness to a reduction in Chinese tariffs, while Beijing has released some US goods from 125% of fees. This movement fueling the hope that the prolonged trade war between the two largest hosts in the world could end. The Chinese Minister of Foreign Affairs Wang Yi said on Tuesday that concessions and withdrawal only dared to Łobuz, emphasizing that dialogue is the key to solving differences.
President Trump said that there was progress and talked to the President of China XI Jinping. However, a spokesman for the Chinese embassy on Friday definitely denied the current negotiations from the USA, stating: “China and the USA do not carry out any consultations or negotiations on tariffs.” The spokesman called Washington to “stop creating the confusion.”
Traders now pay attention to the upcoming report on Australia inflation, established on Wednesday, which can affect the expectations of the RESERVE Bank of Australia policy. RBA is widely expected to implement another pace reduction in May, because decision-makers are preparing for a potential precipitation from newly applied American tariffs.
Australian dollar can recover because trust in American assets weakens
- The American dollar index (DXY), which measures USD in relation to the six main currencies, is above 99.00 at the time of writing. However, the American dollar faced the challenges, because Trump’s unpredictable trade policy shook American trust, which prompted investors to switch to a common currency as an alternative. Any further escalation in the US-China trade war can put additional pressure to the green place.
- According to Wall Street Journal, President Trump intends to reduce the impact of his automotive tariffs, ensuring that the obligations in foreign cars do not form other tariffs and reducing fees for foreign parts used in the production of cars.
- The Secretary of the US Treasury Scott Bessent said on Monday that last week interaction with the Chinese authorities, but did not mention tariffs. Bessent said that although the US government is in communication with China, Beijing must make the first traffic to alleviate the tariff dispute, taking into account trade imbalance between two countries.
- Reuters announced on Sunday that the Secretary of Agriculture in the USA Brooke Rollins said that Trump’s administration has daily discussions with China about tariffs. Rollins emphasized that talks were ongoing and that trade agreements with other countries were also “very close”.
- Michael Hart, the president of the American Chamber of Commerce in China, noticed that it is encouraging that the US and China are browsing tariffs. Hart noticed that although the lists of exclusion for specific categories are reportedly in the work, official ads or rules have not yet been issued. Both the Chinese Ministry of Trade and the US Department of Trade are currently gathering a contribution to this matter.
- Westpac predicted on Thursday that the Australian Bank (RBA) would reduce interest rates by 25 base points at the upcoming meeting on May 20. RBA has adopted an approach based on data in recent quarters, which makes it challenging to predict its activities outside the next meeting.
- The Ministry of Finance in China stated on Friday that global economic growth remains ponderous, and tariffs and trade wars still undermine economic and financial stability. The ministry called all parties to strengthen the international economic and financial system through stronger multilateral cooperation at Reuters.
Australian dollar trades near 0.6400 after withdrawal from levels near the four -month maximum
The Aud/USD pair trads around 0.6420 on Tuesday, and the Daily Chart indicates a stubborn attitude. The pair remains above the nine-day interpretation of the movable average (EMA), while the 14-day relative strength rate (RSI) remains far above 50, the signaling lasted rush up.
On the other hand, immediate resistance is at the last four -month highest level of 0.6439, registered on April 22. A clear break over this level can open the door to the rally towards five months to 0.6515.
Initial support is noticeable on the nine-day EMA 0.6387, with stronger support near the 50-day EMA at 0.6312. Constant movement below these levels would undermine stubborn perspectives and could cause deeper losses, which focused at a low level of 0.5914 March 2020.
Aud/USD: Daily Chart
Australian dollar price today
The table below shows a percentage change in the Australian dollar (AUD) compared to the stock exchange of the main currencies. The Australian dollar was the weakest in relation to the American dollar.
| USD | EUR | GBP | JPy | BOOR | Aud | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.25% | 0.15% | 0.30% | 0.06% | 0.09% | 0.24% | 0.33% | |
| EUR | -0.25% | -0.07% | 0.02% | -0.17% | -0.14% | 0.01% | 0.10% | |
| GBP | -0.15% | 0.07% | 0.08% | -0.10% | -0.05% | 0.09% | 0.17% | |
| JPy | -0.30% | -0.02% | -0.08% | -0.18% | -0.14% | -0.06% | 0.11% | |
| BOOR | -0.06% | 0.17% | 0.10% | 0.18% | 0.03% | 0.19% | 0.27% | |
| Aud | -0.09% | 0.14% | 0.05% | 0.14% | -0.03% | 0.16% | 0.23% | |
| NZD | -0.24% | -0.01% | -0.09% | 0.06% | -0.19% | -0.16% | 0.08% | |
| CHF | -0.33% | -0.10% | -0.17% | -0.11% | -0.27% | -0.23% | -0.08% |
The heat map shows percentage changes in the main currencies towards each other. The basic currency is collected from the left, and the quote currency is collected from the upper order. For example, if you choose the Australian dollar on the left column and move along the horizontal line to the American dollar, the percentage shift displayed in the field will represent the Aud (base)/USD (quote).
Australian dollar questions
One of the most crucial factors of the Australian dollar (AUD) is the level of interest rates determined by the Reserve Bank of Australia (RBA). Because Australia is a country wealthy in resources, another key driver is the price of its greatest export, iron ore. The health of the Chinese economy, its largest trade partner, is a factor, as well as inflation in Australia, growth rate and commercial balance. Market sentiments-no matter how investors take more risky assets (risk) or are looking for safe and sound people (risk)-there is also a factor and a positive risk for AUD.
Bank Reserve Australia (RBA) affects the Australian dollar (AUD), setting the level of interest rates that Australian banks can borrow each other. This affects the level of interest rates in the economy as a whole. The main goal of 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 main central banks support Aud and contrary to relatively low. RBA can also employ quantitative alleviation and tightening to affect credit conditions, with a former negative Aud and the second positive Aud.
China is the largest trading partner in Australia, so the health of the Chinese economy has a immense impact on the value of the Australian dollar (AUD). When the Chinese economy is doing well, it buys more raw materials, goods and services from Australia, raising the demand for Aud and increasing its value. On the contrary, when the Chinese economy does not grow as speedy as expected. Therefore, positive or negative surprises in Chinese growth data often have a direct impact on the Australian dollar and its steam.
The ore of iron is the largest export in Australia, which is $ 118 billion a year according to the details of 2021, and China as the main destination. Therefore, the price of iron ore can be the driving force of the Australian dollar. Basically, if the price of iron ore increases, the audience also increases, as the aggregate demand for currency increases. Otherwise, the price of iron ore will fall. Higher prices of iron ore also cause a greater probability of a positive trade balance for Australia, which is also positive for AUD.
The commercial balance, which is the difference between what the country earns on exports compared to what it pays for imports is another factor that can affect the value of the Australian dollar. If Australia produces a highly sought after export, its currency will gain value only from the surplus of demand created by foreign buyers who want to buy exports compared to what it spends on buying imports. Therefore, a positive net trade balance strengthens Aud, with reverse effect if the trade balance is negative.
