- The Australian dollar moves laterally after the publication of China’s key economic data on Monday.
- China’s retail sales increased 4% year-on-year in January-February, compared to the 3.7% increase in December.
- Market expectations suggest that Fed will maintain its current political position without changes on Wednesday.
The Australian dollar (AUD) is still a volatile against the US dollar (USD) after the publication of China’s economic data on Monday. In addition, the aud/USD torque won ground as the US dollar (USD) weakens before the publication of retail sales data later in the North American session.
China’s retail sales grew by 4% year-on-year in January-February, improving with respect to the 3.7% increase in December. Meanwhile, industrial production increased 5,9% year -on -year during the same period, exceeding 5.3% but slightly below the previous reading of 6.2%.
The AU could gain ground since China presented a special action plan during the weekend to reactivate consumption, raising the feeling of the market throughout the region. The plan includes measures to increase wages, boost household spending and stabilize shares and real estate markets. Any positive development around the Chinese stimulus plan could boost the Australian dollar, since China is an important commercial partner for Australia.
The Aud/USD torque could receive support from the improvement of risk feeling in the midst of reports on a possible discussion of high fire between US President Donald Trump and Russian President Vladimir Putin this week. Trump’s envoy, Steve Witkoff, declared Sunday that he expects the two leaders to speak, adding that Putin “accepts the philosophy” of Trump’s high fire and peace terms, according to The Guardian.
The Australian dollar could gain ground in the midst of an improved risk feeling
- The dollar index (DXY), which measures the USD compared to six main currencies, lowers and is quoted around 103.70 at the time of writing. The dollar faced winds against after the University of Michigan (UOM) reported a drop in its preliminary consumer’s feeling index for March on Friday, falling to 57.9 – the lowest since November 2022 – from the previous reading of 64.7. This figure was also below the consensus estimate of 63.1. Meanwhile, the five -year consumer inflation expectation of the UOM jumped at 3.9% in March, compared to 3.5% in February.
- The markets widely anticipate that the Federal Reserve (FED) will maintain its current political position when it concludes its two -day meeting on Wednesday. According to the CME Fedwatch tool, the operators have discounted almost 75% probability of a quarter -point cut for June.
- On Sunday, the Hutis declared that they had launched an assault that involved 18 ballistic and cruise missiles, along with drones, aimed at the USS Harry S. Truman aircraft carriers and their escort warships in the north of the Red Sea. Meanwhile, the US Secretary of Defense declared that the United States will continue to attack Yemen’s hutis until the attacks on navigation cease, since the group aligned with Iran promised to climb in retaliation for the mortal US attacks of the previous day.
- The US Treasury Secretary, Scott Besent, said Sunday night that he was not worried about the stock market despite multiple falls caused by Trump’s tariff threats. “I have been in the investment business for 35 years, and I can tell you that corrections are healthy. They are normal. What is not healthy is a market that only moves up,” Besent said.
- The decision of the president of the United States, Donald Trump, to maintain a 25% tariff on Australian aluminum and steel exports, valued at almost 1 billion dollars. This movement adds pressure to the commercial perspectives of Australia, impacting the main exports.
- The Australian prime minister, Anthony Albanese, confirmed that Australia will not impose reciprocal tariffs to the US, emphasizing that retaliation measures would only increase costs for Australian consumers and feed inflation.
Technical analysis: The Australian dollar maintains its position above 0.6300, nine -day EMA
The Aud/USD torque is around 0.6340 on Monday, maintaining an upward perspective after recovering its position within the upward channel in the daily chart. The 14 -day relative force (RSI) index has also bounced above 50, further supporting the positive impulse.
The immediate support is observed in the exponential (EMA) mobile average of 0.6309, followed by the EMA of 50 days in 0.6306 and the lower limit of the ascending channel. A decisive breakdown below this critical support zone could weaken the bullish bias, exposing the aud/USD to the low pressure to the minimum of six weeks of 0.6187, registered on March 5.
On the positive side, the Aud/USD torque could try to try the maximum of three months of 0.6408, last seen on February 21. A breakout above this level would reinforce the bullish bias, potentially leading to the torque towards the upper limit of the ascending channel about 0.6470.
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 New Zealand dollar.
| USD | EUR | GBP | JPY | CAD | Aud | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.07% | 0.00% | -0.07% | -0.06% | 0.06% | -0.22% | -0.09% | |
| EUR | 0.07% | -0.05% | -0.42% | 0.02% | -0.01% | -0.16% | -0.05% | |
| GBP | -0.00% | 0.05% | -0.06% | -0.15% | 0.02% | -0.16% | -0.07% | |
| JPY | 0.07% | 0.42% | 0.06% | 0.02% | -0.08% | -0.10% | -0.15% | |
| CAD | 0.06% | -0.02% | 0.15% | -0.02% | -0.09% | -0.16% | -0.58% | |
| Aud | -0.06% | 0.00% | -0.02% | 0.08% | 0.09% | -0.12% | -0.02% | |
| NZD | 0.22% | 0.16% | 0.16% | 0.10% | 0.16% | 0.12% | 0.11% | |
| CHF | 0.09% | 0.05% | 0.07% | 0.15% | 0.58% | 0.02% | -0.11% |
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.
