AUD/USD falls amid Trump’s tariff rhetoric

  • AUD/USD falls with Trump’s tariff threats and strong US jobs data boosting US Dollar gains.
  • Initial claims for jobless benefits in the US fall significantly, underscoring the strength of the labor market.
  • Australian inflation data shows a slight increase but fails to boost the Australian Dollar as traders awaited the FOMC minutes.

The Australian Dollar posted losses of more than 0.40% against the US Dollar, with the latter still supported by US President-elect Donald Trump’s tariff threats. At the time of writing, AUD/USD is trading at 0.6204 after bouncing from daily lows of 0.6187.

AUD/USD faces downward pressure as Trump’s possible economic emergency declaration looms

Recently, US data showed that the labor market remains strong, as initial jobless claims for the week ending January 4 fell from 211,000 to 201,000, according to the US Department of Labor. The numbers were below the consensus of 218,000.

Previously, Automatic Data Processing (ADP) revealed that private companies hired 122,000 people, below the 140,000 predicted by economists.

However, the main driver continues to be Donald Trump, since CNN revealed that it is considering a declaration of national economic emergency to impose new tariffs, according to sources.

On the central bank front, Federal Reserve Governor Christopher Waller said he does not expect the tariffs to lead to persistent inflation, adding that the labor market is not behaving like an overheated economy. He supports further cuts in 2025, but it will depend on the progress of inflation.

On the Australian side, inflation figures were released but failed to increase appetite for the Australian Dollar. Australia’s weighted CPI for November rose 2.3% year-on-year, above expectations and October readings of 2.2% and 2.1% respectively. The trimmed average annual CPI for the same period cooled slightly, from 3.5% to 3.2% year-on-year.

Later in the day, traders await the release of minutes from the December meeting of the Federal Open Market Committee (FOMC), which are expected to show the committee’s reasons for reducing borrowing costs in 2025.

AUD/USD Price Forecast: Technical Outlook

The AUD/USD bearish trend remains intact, after forming a successive series of lower highs and lower lows since October 2024. Although the pair bottomed around 0.6178, further decline is anticipated as the pair remains near 0.6200 . A break of the latter will expose the October 2022 swing low of 0.6169, followed by the April 2020 monthly low of 0.5991.

To the upside, 0.6250 would be the first resistance level before traders can challenge the current week’s peak at 0.6301.

Australian Dollar PRICE Today

The table below shows the percentage change of the Australian Dollar (AUD) against major currencies today. Australian dollar was the strongest currency against the Pound sterling.

USD EUR GBP JPY CAD AUD NZD CHF
USD 0.49% 1.20% 0.32% 0.26% 0.50% 0.68% 0.18%
EUR -0.49% 0.70% -0.13% -0.23% 0.00% 0.19% -0.32%
GBP -1.20% -0.70% -0.84% -0.93% -0.69% -0.51% -1.01%
JPY -0.32% 0.13% 0.84% -0.06% 0.18% 0.35% -0.15%
CAD -0.26% 0.23% 0.93% 0.06% 0.24% 0.42% -0.09%
AUD -0.50% -0.01% 0.69% -0.18% -0.24% 0.18% -0.31%
NZD -0.68% -0.19% 0.51% -0.35% -0.42% -0.18% -0.51%
CHF -0.18% 0.32% 1.01% 0.15% 0.09% 0.31% 0.51%

The heat map shows percentage changes for major currencies. The base currency is selected from the left column, while the quote currency is selected from the top row. For example, if you choose the Australian Dollar from 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 (quote).

Source: Fx Street

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