- The Australian dollar falls despite the relaxation of commercial tensions between the United States and China.
- The US Secretary of Commerce, Lutnick, said both countries agreed to implement the Geneva consensus.
- Chinese Minister Li Chenggang pointed out that the dialogue with the US has been rational and sincere.
The Australian dollar (AUD) falls against the US dollar (USD) on Wednesday, retreating its recent profits. However, the Aud/USD torque could gain ground amid the relaxation of commercial tensions between the United States (USA) and China. Any economic change in China could impact the AU, since China and Australia are nearby commercial partners.
The US Secretary of Commerce, Howard Lutnick, indicated possible resolutions with China. On Tuesday, Lutnick said that US and China have reached a framework to implement the Geneva consensus and are now looking for the approval of US President Donald Trump, according to Bloomberg.
American negotiators also pointed out that “absolutely expect” that problems around the shipments of rare minerals and magnets are resolved with the implementation of the framework. Meanwhile, the Vice Minister of Commerce of China, Li Chenggang, said that communication with the United States has been rational and sincere, and that it will inform about a framework to Chinese leaders.
The Australian dollar slides despite the relaxation of tariff tensions between the US and China
- The American dollar index (DXY), which measures the value of the US dollar compared to six main currencies, is extending its profits for the second consecutive day and quoting higher around 99.10 at the time of writing. The US Consumer Price Index (CPI) will be observed closely on Wednesday, with expectations of an increase of 2.5% year -on -year in May.
- The US Court of Appeals for the Federal Circuit extended a temporary respite for the government while pressing a challenge to a ruling from a lower court last month that blocked tariffs. The Federal Court of Appeals has ruled that President Trump’s broad tariffs can remain in force while legal appeals continue, according to Bloomberg.
- The US Labor Statistics Office (BLS) reported that the US non -agricultural payroll (NFP) increased by 139,000 in May compared to the increase of 147,000 (revised of 177,000) in April. This figure exceeded the market consensus of 130,000. In addition, the unemployment rate remained stable at 4.2%, and average average earnings per hour remained unchanged at 3.9%, both figures were stronger than expected by the market.
- The president of the USA, Donald Trump, requested, in a publication published in Truth Social on Wednesday, the president of the Federal Reserve (Fed), Jerome Powell, who reduces the policy rate. “ADP number outside !!!” Too late “Powell must now lower the rate. It’s amazing! Europe has dropped nine times!” Trump said.
- The National Statistics Office of China reported that the Consumer Price Index (CPI) fell at an annual rhythm of 0.1% in May, after a 0.1% drop in April. However, the market consensus was a 0.2% decrease in the period reported. Meanwhile, China’s IP inflation decreased an intermensual 0.2%, compared to the 0.1% increase in April. China’s production price index (IPP) continues to weaken with an annual 3.3% drop in May, after a 2.7% drop in April.
- 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% previously registered.
- The Australia commercial balance registered a surplus of 5.413 million dollars month by month in April, below the expected 6.100 million and of the 6,892 million (revised of 6.9 billion) in the previous reading. Exports fell an intermencing 2.4% in April, compared to an increase of 7.2% previous (7.6% reviewed). Meanwhile, imports increased 1.1%, compared to a 2.4%drop (revised -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 the 0.6500 support near the nine -day EMA
The AUD/USD quotes around 0.6510 on Wednesday. The technical analysis of the daily chart indicates a predominant bullish bias since the torque is maintained within the ascending channel pattern. In addition, the pair is maintained above the nine -day exponential (EMA) mobile average, which suggests a stronger price impulse in the short term. The 14 -day relative force index (RSI) is also maintained above the 50 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 ascending channel around 0.6710.
In the lower part, the initial support seems to be in the nine -day EMA of 0.6492, aligned with the lower limit of the upward channel around 0.6480. A rupture below this crucial support area could weaken the bullish bias and take the aud/USD torque to try the 50 -day EMA at 0.6416.
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 US dollar.
| USD | EUR | GBP | JPY | CAD | Aud | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.10% | 0.14% | 0.10% | 0.05% | 0.26% | 0.30% | 0.04% | |
| EUR | -0.10% | 0.03% | 0.00% | -0.08% | 0.14% | 0.15% | -0.07% | |
| GBP | -0.14% | -0.03% | -0.06% | -0.08% | 0.13% | 0.13% | -0.11% | |
| JPY | -0.10% | 0.00% | 0.06% | -0.15% | 0.17% | 0.19% | -0.08% | |
| CAD | -0.05% | 0.08% | 0.08% | 0.15% | 0.24% | 0.23% | -0.04% | |
| Aud | -0.26% | -0.14% | -0.13% | -0.17% | -0.24% | 0.00% | -0.22% | |
| NZD | -0.30% | -0.15% | -0.13% | -0.19% | -0.23% | -0.01% | -0.24% | |
| CHF | -0.04% | 0.07% | 0.11% | 0.08% | 0.04% | 0.22% | 0.24% |
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.
