- The Australian dollar is strengthened as negotiations between the US and China gain impulse before the deadline of August 12.
- The annualized growth rate at six months in the advance index of Westpac was decelerated at 0.03% in June, compared to 0.11% in May.
- President Trump announced a commercial agreement with Japan, which includes a 15% tariff on Japanese exports to the US.
The Australian dollar (AUD) gains ground against the US dollar (USD) on Wednesday, extending its winning streak for fourth consecutive session. The Aud/USD torque can be seen in the midst of a better feeling in the market, promoted by the announcement of US President Donald Trump on an important tariff agreement with Japan, which includes a 15% tariff on Japanese exports. In addition, conversations between the United States (USA) and China are gaining impulse before the deadline of August 12.
Westpac reports that its advanced index continues to reflect a weakening of the impulse. The annualized growth rate at six months in the advance index of Westpac-Melbourne Institute was reduced to 0.03% in June, compared to 0.11% in May. The deceleration is mainly due to lower raw material prices, a decreasing feeling and a reduction in the hours worked.
The last minutes of the Bank of the Bank of the Australian Reserve (RBA) indicated that the Board agreed that more rates cuts are justified over time, focusing on the moment and the extension of flexibility. The majority believed that it was better to wait for the confirmation of a slowdown in inflation before flexible. Most members felt that cutting rates three times in four meetings would not be “cautious and gradual.”
The Australian dollar advances while the US dollar loses ground in the midst of a better feeling in the market
- The US dollar index (DXY), which measures the value of the US dollar compared to six main currencies, is extending its losses and quoting around 97.50 at the time of writing. Investors are likely to observe the data of the Purchase Managers Index (PMI) of the US S&P. UU. For July, which will be published later on Thursday.
- President Trump announced a commercial agreement with Japan that includes a 15% tariff on Japanese exports to the US. As part of the agreement, Japan will invest 550,000 million dollars in the US. UU. And it will open its markets to key American products.
- A White House official said that US President Donald Trump will probably say goodbye to the president of the Fed, Jerome Powell, soon. However, Trump denied it in a social truth publication on Sunday, calling him “typically false.”
- Republican congresswoman Anna Paulina Luna has formally accused the president of the FED, Powell, to commit perjury on two different occasions, both derived from discussions about the programmed renovations of the Fed in her central offices in Washington, DC.
- The preliminary consumer’s feeling index of the University of Michigan (UOM) for July rose to 61.8 from 60.7 in June, exceeding 61.5 expectations. Both current conditions and expectations components improved, reflecting a cautious optimism among American homes.
- The Governor of the FOMC, Adriana Kugler, said that the US Central Bank. Uu. It should not lower interest rates “for some time” since the effects of Trump administration tariffs are beginning to be reflected in consumer prices. Kugler added that a restrictive monetary policy is essential to maintain aligned inflation psychology.
- The president of the Fed of San Francisco, Mary Daly, said last week that waiting for two rates cuts this year is a “reasonable” perspective, while warning about waiting for too long. Daly added that rates would eventually be established by 3% or more, which is higher than the neutral rate prior to pandemic.
- The governor of the Fed, Christopher Waller, said he believes that the US Central Bank should reduce its interest rate objective at the July meeting, citing growing economic risks. Waller added that delaying cuts runs the risk of needing a more aggressive action later.
- The US Secretary of Commerce, Howard Lutnick, declared bluntly in a televised interview: “That is a hard deadline, so on August 1, the new tariff rates will come into force. Nothing prevents countries from talking to us after August 1, but they will begin paying tariffs on August 1.”
- The Popular Bank of China (PBOC) decided on Monday to maintain preferential loan rates (LPR) for one and five years without changes in 3.00% and 3.50%, respectively. It is important to note that any change in the Chinese economy could impact the Australian dollar, since China and Australia are nearby commercial partners.
- China’s Minister of Commerce, Wang Wentao, said Friday that economic and commercial relations with the United States have gone through storms, but remain important for both. Wentao also said that mutual benefit is the essence of commercial ties between the US and China. The Geneva Agreement and the London framework effectively stabilized commercial ties and cooling tensions, he added.
The Australian dollar rises above 0.6550 after exceeding the nine -day Ema
The Aud/USD torque is negotiating around 0.6560 on Wednesday. The technical analysis of the daily chart suggests a predominant bullish bias, since the torque is maintained within the ascending channel pattern. The 14 -day relative force (RSI) index is positioned above level 50, suggesting that a bullish bias is active. In addition, the pair has also overcome the nine -day exponential mobile average (EMA), indicating that the impulse of the short -term price is being strengthened.
On the positive side, the Aud/USD torque could have as its objective the maximum of eight months of 0.6595, which was reached on July 11. A rupture above this level could reinforce the bullish bias and lead the region around the upper limit of the upward channel around 0.6670.
The main support seems to be in the nine -day EMA at 0.6537, followed by the 50 -day EMA of 0.6497. A rupture below this level would decrease the impulse of the price in the short and medium term and put down pressure on the AUD/USD torque to test the lower limit of the upward channel around 0.6470, aligned with the minimum of three weeks at 0.6454, which was recorded on July 17.
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 in front of the euro.
| USD | EUR | GBP | JPY | CAD | Aud | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.15% | 0.06% | -0.07% | -0.07% | -0.17% | -0.29% | 0.09% | |
| EUR | -0.15% | -0.09% | -0.22% | -0.21% | -0.33% | -0.44% | -0.05% | |
| GBP | -0.06% | 0.09% | -0.12% | -0.12% | -0.25% | -0.34% | 0.09% | |
| JPY | 0.07% | 0.22% | 0.12% | 0.03% | -0.05% | -0.10% | 0.19% | |
| CAD | 0.07% | 0.21% | 0.12% | -0.03% | -0.08% | -0.01% | 0.19% | |
| Aud | 0.17% | 0.33% | 0.25% | 0.05% | 0.08% | -0.09% | 0.33% | |
| NZD | 0.29% | 0.44% | 0.34% | 0.10% | 0.01% | 0.09% | 0.44% | |
| CHF | -0.09% | 0.05% | -0.09% | -0.19% | -0.19% | -0.33% | -0.44% |
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).
Australian dollar – frequent questions
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.
