- The Australian dollar gains ground as the US dollar weakens in the midst of lower treasure yields.
- The AU could have difficulties since the governor of the RBA, Michele Bullock, maintained a moderate tone by suggesting additional features of rates.
- The US dollar depreciates as the treasure yield at 30 years falls to 5.03% after 5.15%.
The Australian dollar (AUD) records profits against the US dollar (USD) on Friday after registering losses in the previous session. The Aud/USD pair jumps as the dollar is under pressure, driven by the lower yields of the US Treasury, which continue to depreciate after the US bonus yield at 30 years reached its maximum in 19 months. The “One Big Beautiful Bill” of US President Donald Trump went through the US House of Representatives and is on his way to the Senate, which has generated concerns about the increase in the fiscal deficit in the United States (USA).
However, the Aud/USD torque depreciated on Thursday since the US dollar received support immediately after the publication of more solid data from the Purchase Managing Index (PMI) of the US Global S&P. Meanwhile, the manufacturing PMI rose to 52.3 from 50.2 previous, while the services PMI rose to 52.3 from 50.8.
Earlier this week, the Bank of the Australian Reserve (RBA) made a 25 basic point rate cut, reducing its official cash (OCR) rate to 3.85% from 4.10%. The Governor of the RBA, Michele Bullock, maintained a moderate tone by supporting the decision cutting of the Central Bank. Bullock mentioned that the Board is prepared to take additional measures if necessary, increasing the possibility of future changes. He also noted that controlling inflation is important and said that a rate cut was a proactive step and improved the feeling of the market, which was adequate given the state of the economy.
The Australian dollar advances while the US dollar loses ground in the midst of lower yields of the treasure
- The US dollar index (DXY), which tracks the US dollar (USD) compared to a basket of six main currencies, is going back to recent profits. At the time of writing, the DXY is quoted around 99.70 while the 30 -year yield of the US Treasury Bonus is quoted at 5.03% after 5.15% retreat, reached in the previous session, its highest level since November 2023.
- The US House of Representatives approved Trump’s budget for a vote on Thursday. The proposal 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 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 had difficulties 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.
- Australia’s manufacturing purchasing managers index stood at 51.7 in May compared to 51.7 previous. Meanwhile, the PMI of services decreases to 50.5 in May from the previous reading of 51.0, while the compound PMI is reduced to 50.6 in May from 51.0 above.
- The Australian, risk -sensitive dollar, gained support for a renewed optimism around a 90 -day commercial truce between the US and China and hopes of more commercial agreements with other countries. Meanwhile, US Treasury Secretary Scott Besent told CNN on Sunday that President Donald Trump intends to implement tariffs at previously threatened levels on commercial partners who do not participate in “good faith” negotiations.
- The audience was also affected by political agitation in Australia. After the withdrawal of the National Party of his collaboration with the Liberal Party, the opposition coalition dissolved. The Labor Party in power, meanwhile, took advantage of agitation and regained power with a more robust and expansive agenda.
The Australian dollar is consolidated around the psychological level of 0.6450
The aud/USD torque is quoted around 0.6430 on Friday with a bullish bias, supported by daily technical indicators. The torque maintains its position above the nine -day exponential (EMA) mobile average, while the 14 -day relative force (RSI) index remains above the 50 mark, both supporting a persistent bullish impulse.
On the positive side, the maximum of six months of 0.6515, registered on December 2, 2024, would provide strong resistance. A decisive rupture above this barrier could support the torque to test the maximum of seven months in 0.6687, which was reached in November 2024.
The nine -day EMA of 0.6425 is acting as an immediate support, followed by the 50 -day EMA about 0.6369. A greater depreciation would undermine the upward perspective, possibly opening the way to the minimum of March 2020 of 0.5914.
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 | -0.26% | -0.16% | -0.24% | -0.15% | -0.31% | -0.22% | -0.25% | |
| EUR | 0.26% | 0.10% | 0.00% | 0.11% | -0.05% | 0.06% | 0.01% | |
| GBP | 0.16% | -0.10% | -0.08% | 0.04% | -0.12% | -0.04% | -0.08% | |
| JPY | 0.24% | 0.00% | 0.08% | 0.12% | -0.06% | 0.05% | 0.01% | |
| CAD | 0.15% | -0.11% | -0.04% | -0.12% | -0.19% | -0.06% | -0.10% | |
| Aud | 0.31% | 0.05% | 0.12% | 0.06% | 0.19% | 0.11% | 0.07% | |
| NZD | 0.22% | -0.06% | 0.04% | -0.05% | 0.06% | -0.11% | -0.04% | |
| CHF | 0.25% | -0.01% | 0.08% | -0.01% | 0.10% | -0.07% | 0.04% |
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.
