- The Australian dollar bounces after losing more than 0.50% in the previous session.
- The AU can lose ground due to a state of risk aversion while Israel and Iran continue to attack each other.
- It is widely expected that the Federal Reserve maintain interest rates without changes on Wednesday.
The Australian dollar (AUD) rises against the US dollar (USD) on Wednesday after registering losses of more than 0.50% in the previous session. However, the Aud/Usd torque fought due to an appetite due to the reduced risk in the midst of the growing tensions in the Middle East. Israel and Iran continue their reprisal cycle. However, Tehran has urged several countries, including Oman, Catar and Saudi Arabia, to press US President Donald Trump to declare a high immediate fire.
The US dollar can recover land due to a greater demand for safe refuge amid the growing geopolitical tensions in the Middle East. On Tuesday, US President Donald Trump published on his social media platform, asking for the “unconditional surrender” of Iran. Investors are concerned that the United States participates in the conflict between Israel and Iran.
G7 leaders issued a joint statement on Monday: “We have been consistently clear in which Iran can never have a nuclear weapon.” The leaders emphasized that resolving the Iranian crisis could lead to a broader discawacy of hostilities in the region.
Australia’s next labor data, including employment change and unemployment rate, will be published later this week. Employment figures will probably offer a new impulse to the domestic economy and will shape the expectations about the policy perspective of the Bank of the Australian Reserve (RBA).
The Australian dollar advances while the US dollar falls before the Fed policy decision
- The dollar index (DXY), which measures the value of the US dollar compared to six main currencies, is going down and quoting around 98.70 at the time of writing. The dollar faces challenges due to retail sales of the USa weakest than expected published on Tuesday.
- Retail sales of the US fell 0.9% in May, worse than the expected fall of 0.7% and the 0.1% decrease in April (reviewed from +0.1%).
- It is anticipated that the Federal Reserve (FED) maintain the interest rate without changes in the June meeting scheduled for Wednesday. The operators now see a probability of almost 80% of a Fed fees cut in September, followed by another in October, according to Reuters.
- Last week, President Trump expanded steel tariffs from June 23 on the “imported products” products “, including appliances, such as dishwasher, washing machines, refrigerators, etc. Tariffs were initially imposed at 25% in March and then doubled to 50% for most countries. This is the second time the scope of the affected products is extended.
- China’s retail sales increased by 6.4% year -on -year in May, exceeding 5.0% expected and the increase of 5.1% in April. Meanwhile, industrial production increased 5.8% year -on -year, but was below the 5.9% and 6.1% prognosis.
- In addition, the National Statistics Office (NBS) of China said that the domestic economy is expected to remain generally stable during the first half (H1) of 2025. However, economic growth in China can face difficulties from the second quarter due to uncertain commercial policies.
The Australian dollar bounces from the lower limit of the ascending channel
The AUD/USD is quoted around 0.6480 on Wednesday, with a predominant bullish bias, since the technical analysis of the daily graph indicates that the torque is maintained within the ascending channel. In addition, the 14 -day relative force (RSI) index is positioned slightly above the 50th mark, suggesting a predominant bullish perspective. However, the pair has moved below the nine -day exponential (EMA) mobile average, indicating that the impulse of the short -term price is weakening.
The nine -day EMA at 0.6495 acts as the immediate barrier, followed by the maximum of seven months of 0.6552, which was recorded on June 16. A rupture above this level could support the torque to point to the maximum of eight months at 0.6687, followed by the upper limit of the upward channel around 0.6740.
On the negative side, the AUD/USD torque can point to the lower limit of the upward channel around 0.6480. A rupture below the channel would weaken the bullish bias and lead to the torque to test the 50 -day EMA at 0.6431.
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 Swiss Franco.
| USD | EUR | GBP | JPY | CAD | Aud | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.15% | -0.07% | -0.06% | 0.04% | -0.07% | -0.13% | -0.02% | |
| EUR | 0.15% | 0.08% | 0.08% | 0.11% | -0.02% | 0.09% | 0.14% | |
| GBP | 0.07% | -0.08% | 0.00% | 0.02% | -0.10% | -0.12% | 0.07% | |
| JPY | 0.06% | -0.08% | 0.00% | 0.12% | 0.00% | 0.15% | 0.28% | |
| CAD | -0.04% | -0.11% | -0.02% | -0.12% | -0.10% | -0.14% | 0.05% | |
| Aud | 0.07% | 0.02% | 0.10% | -0.00% | 0.10% | 0.12% | 0.18% | |
| NZD | 0.13% | -0.09% | 0.12% | -0.15% | 0.14% | -0.12% | 0.06% | |
| CHF | 0.02% | -0.14% | -0.07% | -0.28% | -0.05% | -0.18% | -0.06% |
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.
