- The AUD/USD receives the appetite support for the risk, cling to 0.6300 early Monday.
- Only 20% and not 145% of American tariffs on China’s semiconductors and electronic provide some relief to markets.
- The approach remains in China’s commercial data and Fed statements later for new commercial incentives.
The AUD/USD maintains the three -day recovery impulse from a minimum of five years on Monday at the beginning of the week, registering small profits about 0.6300.
The Aud/USD celebrates the appetite for risk
The last rebound is linked to the extension of the feeling of positive risk from the American session on Friday to the first Asian operations on Monday. The markets breathe relieved, digesting the news of the weekend about less pronounced tariffs announced by US President Donald Trump on Sunday night about Chinese semiconductor imports and the electronics supply chain.
Deminting the news of tariff exemption, Trump clarified that these products will be subject to existing 20% ​​tariffs on fentanyl and not to the levies of 145%.
Futures of higher American actions reflect the positive tone of the risk, with futures of the S&P 500 earning almost 0.80% so far. However, it remains to be seen if the Australian torque maintains the rise, since the US dollar could also experience a slight rebound from a minimum of three years with an improved risk profile.
The US dollar reached a new minimum of three years against its main currency rivals after the commercial war between the US and China deepened on Friday. China responded by increasing additional tariffs on US goods to 125% from 84%, but mentioned ignoring more US responses.
China’s comment also comforts markets, supporting the risk -sensitive Australian.
Looking ahead, the PAR expects the commercial data of China, with a key approach in its exports in the middle of the commercial war. Although the total impact of US tariffs will not be known, the data could provide some new commercial incentives in the main torque.
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.
