- The Australian dollar is strengthened while the US dollar attracts sellers due to growing economic concerns in the US.
- However, the AU could lose ground since the RBA could implement more rate cuts.
- The US fiscal deficit could increase if Trump’s “One Big Beautiful Bill” passes through the Senate.
The Australian dollar (AUD) continues to gain ground against the US dollar (USD) on Monday, marking new six months. The Aud/USD pair receives support while the US dollar remains under low pressure in the middle of the growing uncertainty about the United States economy (USA).
The AUD’s bullish potential could be restricted due to moderate feeling around the policy perspectives of the Australian Reserve Bank (RBA). After the reduction of interest rates of 25 basic points by the RBA last week, Governor Michele Bullock mentioned that the Central Bank is prepared to take additional measures if economic perspectives deteriorate drastically, increasing the possibility of future feat cuts.
The Australian dollar received support from a renewed optimism around a 90 -day commercial truce between the US and China and hopes of more commercial agreements with other countries. However, the Bank of the Australian Reserve will closely monitor the additional developments in commercial negotiations between the US and China, since China is an important commercial partner of Australia.
The Australian dollar can be seen while the US dollar fights due to fears about the increase in fiscal deficit
- The American dollar index (DXY), which tracks the US dollar (USD) compared to a basket of six main currencies, is extending its losses and quoting around 98.70. The dollar fights in the midst of the growing uncertainty about the US economy. US markets will be closed due to the fallen day holiday.
- The US fiscal deficit could increase even more when Trump’s “One Big Beautiful Bill” passes through the Senate, increasing the risk that bond yields stay high for longer. Higher bond yields can maintain high indebted costs for consumers, companies and governments.
- The Trump bill is expected to increase the deficit at 3.8 billion dollars, since it would offer tax cuts on tips and loans for cars manufactured in the US, according to the Congress Budget Office (CBO).
- The president of the Federal Reserve of Chicago (Fed), Austan Goolsbee, said Friday that Trump’s latest tariff threats probably postpone changes in interest rates. Meanwhile, Kansas City Fed President Jeffrey Schmid said that policies responsible will evaluate concrete data before formulating decisions about interest rates, and the Fed needs to be careful with the importance it gives to soft data.
- The governor of the Fed, Christopher Waller, said Thursday that the markets are monitoring the fiscal policy. Waller added that if the tariffs are about 10%, the economy would be in good shape for the second semester, and the Fed could be in a position to cut later in the year.
- The US dollar continues to fight after Moody’s reduced the US credit rating of AAA to AA1. This movement is aligned with similar sales by Fitch Ratings in 2023 and Standard & Poor’s in 2011. Moody’s now projects that the US federal debt will reach around 134% of GDP by 2035, compared to 98% in 2023, with the budget deficit that is expected to be extended to almost 9% of GDP. This deterioration is attributed to the increase in debt service costs, the expansion of rights programs and the fall in tax revenues.
- The China Ministry of Commerce said last week that US measures on China’s advanced chips are “typical of unilateral intimidation and protectionism” and prevent the stability of the industrial chain and global supply of semiconductors. Chinese authorities asked the United States to quickly correct their wrong practices.
The Australian dollar rises above 0.6500; Mark new six months
The AUD/USD is quoting around 0.6530 on Monday with a persistent bullish bias. The daily technical indicators suggest that the pair rises above the nine -day exponential (EMA) mobile average, while the 14 -day relative force index (RSI) advances towards the 70th mark, both supporting a bullish perspective.
The Aud/USD torque has exceeded the previous six months of 0.6515, registered on December 2, 2024. This successful break would provide support to the torque to approach to the maximum of seven months in 0.6687, registered in November 2024.
In the lower part, the nine -day EMA of 0.6456 would act as an immediate support, followed by the 50 -day EMA about 0.6378. The decisive breakdown below these levels would weaken the impulse of short and medium term prices and open the doors so that the torque navigate in the region around 0.5914, the lowest since March 2020.
AUD/USD: Daily graphic
Australian dollar Price today
The lower table shows the percentage of change of the Australian dollar (AUD) compared to the main currencies today. Australian dollar was the strongest currency against the US dollar.
| USD | EUR | GBP | JPY | CAD | Aud | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.39% | -0.42% | -0.11% | -0.25% | -0.56% | -0.62% | -0.12% | |
| EUR | 0.39% | -0.03% | 0.32% | 0.14% | -0.17% | -0.22% | 0.28% | |
| GBP | 0.42% | 0.03% | 0.02% | 0.17% | -0.14% | -0.19% | 0.33% | |
| JPY | 0.11% | -0.32% | -0.02% | -0.15% | -0.47% | -0.58% | -0.02% | |
| CAD | 0.25% | -0.14% | -0.17% | 0.15% | -0.29% | -0.36% | 0.15% | |
| Aud | 0.56% | 0.17% | 0.14% | 0.47% | 0.29% | -0.09% | 0.47% | |
| NZD | 0.62% | 0.22% | 0.19% | 0.58% | 0.36% | 0.09% | 0.52% | |
| CHF | 0.12% | -0.28% | -0.33% | 0.02% | -0.15% | -0.47% | -0.52% |
The heat map shows the percentage changes of the main currencies. The base currency is selected from the left column, while the contribution currency is selected in the upper row. For example, if you choose the Australian dollar of 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 (quotation).
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.
