- The Aud/USD continues its ascending trajectory, overcoming the 0.6300 obstacle as the bullish impulse accumulates.
- The US inflation data were lower than expected, increasing speculation about a Fed feat cut before anticipated.
- Commercial tensions persist while the US advances with new tariffs, generating concerns about global economic growth.
- The technical indicators show a bullish impulse in improvement, with the AUD/USD pointing to the resistance zone of 0.6360.
The Aud/Usd torque added to the rise on Tuesday and exceeded the 0.6300 obstacle despite a decent rebound in the US dollar. The PAR extended the profits on Wednesday, supported by the softing of the United States inflation data (USA), which reinforced the expectations that the Federal Reserve (Fed) could adjust interest rates before anticipated. While the US dollar (USD) tried a recovery, the feeling of risk remained favorable for the Australian dollar (Aud), opening the door to a possible proof of the monthly maximums about 0.6360.
What moves the market today: the Australian dollar extends profits as the US CPI
- The US consumer pricing index (CPI) inflation was slowed faster than anticipated in February, with the inflation of the general CPI decreasing to 0.2% intermensual and 2.8% year -on -year.
- The inflation data in cooling, although even above the 2% objective of the Federal Reserve, reinforced the expectations of possible adjustments in the policy. Fed rates markets now value better probabilities of a rate cut for June, changing from the previous consensus of July.
- The US trade policy remains in the center of attention while President Donald Trump reiterated his intention to impose tariffs on imported cars. During a meeting with Irish Prime Minister Micheál Martin, Trump emphasized that the European Union has been “hard” with the US trade, suggesting possible additional protectionist measures. Comments fed market uncertainty regarding the next trade negotiations.
- The Australian dollar remained resistant despite commercial tensions between the US and China. Concerns persist that the increase in tariffs could significantly impact Australian business activity, given the strong Australian dependence on exports to China. Until now, the US has imposed 20% tariffs on Chinese imports, and the risk of additional measures remains present.
AUD/USD Technical Analysis: The rise impulse is strengthened towards 0.6360
The Aud/USD rose on Wednesday, moving towards the region of 0.6315 during the American session, extending its rebound from the beginning of the week. Despite an attempt to recover in the US dollar, the pair maintained upward traction, with technical indicators showing conditions in improvement.
The indicator of convergence/divergence of mobile socks (MACD) continues to print Red Histogram Decreasing Histogram, indicating a decrease in bearish pressure. Meanwhile, the Relative Force Index (RSI) has risen to 54, entering positive territory and suggesting an increase in purchase impulse.
The torque has recovered its position and is approaching key levels of resistance. The next upward objective is about 0.6360, where a break could accelerate the bullish impulse. Down, the initial support is observed around 0.6280, with a stronger demand expected about 0.6250 if the sales pressure appears again.
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.
