- The Aud/USD advances about 0.6390 despite the growing commercial war between the US and China.
- The US president Trump announced a 90 -day break in reciprocal tariffs for all its commercial partners, except China.
- Trump’s tariff agenda has kept the US dollar at a disadvantage.
The Aud/USD pair extends its profits for the fifth day of negotiation on Tuesday and reviews the monthly maximum of 0.6380. The Aussie torque works strongly in recent days of negotiation, despite the fact that the intensification of the commercial war between the United States (USA) and China has fogged the perspectives of the Australian economy.
Historically, the Australian dollar (AUD) has a lower yield when China’s economic perspectives deteriorate, given the high dependence of the Australian economy of its exports to the Asian giant.
The president of the USA, Donald Trump, has declared a 90 -day break in the execution of reciprocal tariffs for all its commercial partners, except China. The second largest nation in the world responded to Trump’s reciprocal tariffs, imposing additional tariffs on the imported goods of USA.
Meanwhile, the US dollar (USD) struggles to maintain their recent minimums, since the participants of the financial market expect Trump’s economic policies to be painful for the US economy in the short term. Trump’s tariff policies are expected to boost inflationary pressures and slow economic growth. The US dollar index (DXY), which tracks the value of the dollar against six main currencies, precautions slightly above the minimum of three years of 99.00.
The AUD/USD extends its rise near the maximum of March 18, 0.6390, the highest level seen in more than a month. The short -term perspectives of the torque are optimistic, since it remains above the exponential mobile socks (EMA) of 20 and 50 days, which quote around 0.6244 and 0.6270, respectively.
The 14 -day relative force index (RSI) rises about 58.00 after a V -shaped recovery below 40.00. Such scenario indicates a strong bull reversal.
More rise would appear if the torque breaks above the maximum of March 18, 0.6390. The scenario will open doors for the torque towards the maximum of December 5, 0.6456 and the round level resistance of 0.6500.
On the other hand, a downward movement below the minimum of March 4, 0.6187 will expose the torque towards the minimum of February 0.6087, followed by the psychological support of 0.6000.
Daily Aud/USD
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.
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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.
