- The AUD/USD is negotiated around the 0.6000 region in the American session on Tuesday after cutting previous losses within a volatile range.
- The new climbing of tariffs between the US and China aviva the fears, but the signs of global conversations and the caution of the Fed moderate risk aversion.
- Mixed technical signals arise; The price trapped in the average range with divergent over -vendent oscilators.
The Australian dollar starred in a fragile rebound during the American session on Tuesday, staying close to the 0.6000 area after bouncing from the minimums of the session. This recovery occurred as the previous strength of the US dollar faded, helping risk currencies such as Aussie to stabilize within its recent range of minimum of five years. The feeling of the market improved something after the reports that the US is in commercial conversations with dozens of countries, although China remains a clear outlier.
At the same time, the last lot of Washington tariffs – which presents a cumulative import tariff that exceeds 100% on Chinese goods – has kept the low pressure alive. In the Technical Front, the AUD/USD is still inclined downward, but the mixed signals through the oscillators suggest a possible short -term consolidation.
Daily summary of market movements: tariff confrontation persists
- After a turbulent beginning of the week, the feeling improved on Tuesday after the confirmation of the White House that the tariffs on China entered into force at noon est. Despite the climbing, American officials revealed ongoing discussions with more than 50 countries, suggesting a multilateral approach out of the reach of China.
- Fed officials expressed concern about the inflationary risks of generalized tariffs. The president of the Fed of San Francisco, Daly, warned about the growing pressure on prices, while Goolsbee of Chicago stressed the limited flexibility so that importers navigate through the new commercial panorama.
- Despite the threats of retaliation of Beijing, the appetite for the risk returned as the markets bet on possible advances in global negotiations. The shares trimmed losses, the gold fell below the 3,000 $ brand, and the US dollar index (DXY) extended its setback to the threshold of 103.00.
- The China Ministry of Commerce condemned Washington’s new tariff offensive as a counterproductive, promising a firm response. The comments revived fears about the vulnerability of Australia exports, especially given their dependence on the goods destined for China.
- Meanwhile, the Bank of the Australian Reserve remains low scrutiny, with growing expectations of a policy relief as winds against trade continue to threaten the internal perspectives.
Technical analysis
The AUD/USD is sailing in a narrow range around the midpoint of its daily limits, showing a hesitant movement after days of weakness pronounced. The price action is still bassist in the broadest context, but the intradic signals are becoming confusing.
The convergence/divergence of mobile socks (MACD) has printed another red bar, reinforcing the dominant bearish trend. In contrast, the relative force index (RSI) remains stuck by about 29, indicating overall conditions and tending to a possible rebound. Adding complexity, the raw material channel index (CCI) also supports a recovery, suggesting that the torque could be prepared for short -term rise correction.
However, the trend indicators continue to weigh on the pair. The 10 -day exponential (EMA) mobile average, together with the simple mobile socks (SMA) of 20, 100 and 200 days, all have a descending slope, offering any relief to the bullies. The average directional index (ADX) remains neutral, further supporting the notion of a possible lateral movement instead of a directional conviction.
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.
