- The AUD/USD moves up at about 0.6450 in the early Asian session on Monday.
- Albanese won a second mandate as a prime minister in the results of the federal elections on Saturday.
- The US NFP increased by 177,000 in April, stronger than expected.
The Aud/USD gains strength around 0.6450 during the Asian session on Monday. The Australian dollar (Aud) is strengthened against the US dollar after the victory of the Australian prime minister Anthony Albanese in a second three -year term in federal elections 2025, making important advances in the results of the federal elections on Saturday.
The leader of the Labor Party and Prime Minister Albanese demanded a majority in Parliament on Saturday, with more than 45% of the votes counted. Albanese became the first leader in decades to ensure a second mandate, defeating the opposition leader Peter Dutton of the liberal-national coalition of center-right. The expectations of policy continuity under Albanese after their re -election for a second mandate could boost the Australian dollar in the short term.
Attention will move to a possible improvement in commercial relations between the US and China. The China Ministry of Commerce said Friday that Beijing is considering an US offer to participate in commercial negotiations, a week after US President Donald Trump said the conversations were already underway. However, any escalation signal between the two largest economies in the world could weigh on the Australian dollar, which acts as a China Proxy, since China is an important commercial partner of Australia.
The data published by the US Labor Statistics Office (BLS) on Friday showed that non -agricultural payroll (NFP) in the United States (USA) increased by 177,000 in April. This figure followed the increase of 185,000 (reviewed since 228,000) observed in March and exceeded the 130,000 market consensus.
Meanwhile, the unemployment rate remained unchanged in 4.2% in April, as expected, while average average earnings per hour remained stable at 3.8% year -on -year in the same informed period. The US dollar (USD) is still weak despite the optimistic US NFP report, since operators are concerned about China’s headlines. Later on Monday, the operators will be attentive to the Purchasing Managers Index (PMI) of the US ISM Services for April in search of a new impulse.
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.
