- The Australian dollar possibly descends due to a feeling of weakened risk amid the growing tensions between Israel and Iran.
- Australian consumer inflation expectations were 5% in June, above the previous increase of 4.1%.
- The US dollar faces challenges as the softest data of the CPI increase the probabilities of a Fed rates cut in September.
The Australian dollar (Aud) lowers against the US dollar (USD) on Thursday, extending its losses for the second consecutive day. However, the Aud/USD torque could be seen since the softest inflation data in the US have increased bets for a federal reserve rates (FED) in September.
The president of the United States (USA), Donald Trump, published in Truth Social, saying that the commercial agreement with China is made and added that it is subject to its final approval and that of Chinese President Xi Jinping. “We are obtaining a total of 55% tariffs, China is getting 10%. The relationship is excellent! Thank you for your attention to this matter,” Trump said Wednesday. Any economic change in China could impact the AU, since China and Australia are nearby commercial partners.
China will grant only rare earth export licenses for six months to American manufacturers and motorists, suggesting that China wants to have control over critical minerals such as lever in future negotiations, according to the Wall Street Journal (with restricted access).
The Aud, sensitive to risk, could face challenges as tensions increase between Israel and Iran, after the United States advised some Americans to leave the Middle East. President Trump said Wednesday that the US would not allow Iran to have a nuclear weapon, according to Reuters. In addition, the senior correspondent of the White House of CBS News, Jennifer Jacobs, reported that US officials have been told that Israel is completely ready to launch an operation in Iran.
The Australian dollar depreciates despite a weaker US dollar in the middle of softest inflation data
- The American dollar index (DXY), which measures the value of the US dollar compared to six main currencies, is extending its losses for the second consecutive day and quoting down around 98.30 at the time of writing. The dollar depreciates since inflation in the US was colder than expected, increasing the probabilities of fed rates cuts.
- The US Consumer Price Index (CPI) rose 2.4% year -on -year in May, slightly above the previous 2.3%, but below the market expectations of a 2.5% increase. The underlying IPC, which excludes volatile food and energy prices, rose 2.8% year -on -year in May, compared to the 2.9% consensus.
- On Wednesday, President Trump declared that he would like to extend the period of trade negotiations, but does not believe it is necessary. Trump also said he will establish unilateral rates within two weeks.
- The Court of Appeals of the Federal Circuit extended on Tuesday a previous temporary relief for the government while pressing a challenge to a ruling of a lower court last month that blocked tariffs. The Federal Court of Appeals has ruled that President Trump’s broad tariffs can continue in force while legal appeals continue, according to Bloomberg.
- The Commercial Balance of China (CNY) reached CNY743.56 billion in May, expanding from the previous CNY689.99 billion surplus. Meanwhile, exports increased 6.3% year -on -year compared to 9.3% in April. The imports of the country fell 2.1% year -on -year in the same period, from an increase of 0.8% recorded above.
- The Australia trade balance registered a surplus of 5,413 million dollars month by month in April, below the 6,100 million expected and 6,892 million (reviewed from 6,900 million) in the previous reading. Exports fell 2.4% month by month in April, compared to an increase of 7.2% previous (reviewed from 7.6%). Meanwhile, imports increased 1.1%, compared to a 2.4%drop (reviewed from -2.2%) observed in March. The Caixin Services PMI of China rose to 51.1 in May as expected, from 50.7 in April.
The Australian dollar proves 0.6500 within the crucial support zone
The aud/USD is quoting around 0.6500 on Tuesday. The technical analysis of the daily graphic suggests a possible weakening of the bullish bias as the Par tries to break below the lower limit of the ascending channel. In addition, the pair is slightly positioned above the nine -day exponential (EMA) mobile average; Breaking below would weaken the impulse of short -term price. However, the 14 -day relative force index (RSI) is maintained above the 50th mark, indicating a bullish bias.
The Aud/USD torque could aim an immediate barrier in a maximum of seven months of 0.6538, which was reached on June 5. Additional advances could lead to the region to explore the region around eight months at 0.6687, aligned with the upper limit of the upward channel around 0.6720.
Downwards, the initial support seems to be in the nine -day EMA of 0.6492, aligned with the lower limit of the ascending channel around 0.6490. A rupture below this crucial support zone could weaken the bullish bias and take the aud/USD torque to test the 50 -day EMA at 0.6419.
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 weakest currency against the Swiss Franco.
| USD | EUR | GBP | JPY | CAD | Aud | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.27% | -0.27% | -0.45% | -0.02% | 0.26% | 0.13% | -0.48% | |
| EUR | 0.27% | 0.00% | -0.18% | 0.26% | 0.51% | 0.41% | -0.18% | |
| GBP | 0.27% | -0.01% | -0.20% | 0.24% | 0.49% | 0.39% | -0.22% | |
| JPY | 0.45% | 0.18% | 0.20% | 0.41% | 0.68% | 0.52% | -0.03% | |
| CAD | 0.02% | -0.26% | -0.24% | -0.41% | 0.28% | 0.13% | -0.46% | |
| Aud | -0.26% | -0.51% | -0.49% | -0.68% | -0.28% | -0.10% | -0.70% | |
| NZD | -0.13% | -0.41% | -0.39% | -0.52% | -0.13% | 0.10% | -0.60% | |
| CHF | 0.48% | 0.18% | 0.22% | 0.03% | 0.46% | 0.70% | 0.60% |
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.
