The Australian dollar loses land as the US dollar is appreciated in the midst of Trump’s latest threats

• The Australian dollar loses ground after tariff threats made by US President Donald Trump.
• The AU faced challenges in a greater risk aversion due to the news of the growing impulse among Trump’s advisors to implement tariffs.
• Trump declared that “he wants ‘much larger’ tariffs than 2.5%,” the rate proposed by Treasury Secretary Scott Besent.

The Australian dollar (aud) continues to fall for the second consecutive day against the US dollar (USD) on Tuesday. The weakness of the Aud/USD torque may be linked to the tariff threats of US President Donald Trump.

The Aud, sensitive to risk, also faced challenges in a greater risk aversion due to the news about the growing impulse among the advisors of US President Donald Trump to impose 25% tariffs on Mexico and Canada from February 1 .

President Trump announced plans on Monday to impose tariffs on imports of computer chips, pharmaceutical products, steel, aluminum and copper. The objective is to transfer production to the United States (USA) and strengthen national manufacturing.

Trump also commented on the popular application of social networks Tiktok, affirming, “we will have many people bidding for Tiktok.” He emphasized his position on limiting China’s participation, saying, “I don’t want China involved in Tiktok.”

The Australian dollar falls due to the greatest risk aversion with respect to Trump’s policies

• The US dollar index (DXY), which tracks the value of the dollar against six main currencies, rises to about 107.80 at the time of writing. The operators will probably observe the orders of the US durable goods, the Conference Board Conference Conference Conference Index and the Richmond Fed manufacturing index later on Tuesday.
• Scott Besent, the Treasury Secretary Bajo Trump, declared that it aims to introduce new universal tariffs on US imports, starting in 2.5%. These tariffs could rise up to 20%, reflecting Trump’s aggressive position on commercial policies, consisting of last year’s campaign.
• Speaking with the reporters aboard the Air Force One early on Tuesday, the US president Donald Trump declared that “he wants ‘much larger’ tariffs than 2.5%”, as proposed by Treasury Secretary Scott Besent. However, Trump said he has not yet decided the specific levels of tariffs.
• The USD gained force amid the uncertainty regarding the impact of the commercial and immigration policies of the US president Donald Trump. This context can encourage the Federal Reserve (FED) to maintain a cautious posture about the reduction of interest rates this year.
• According to Global S&P data published on Friday, the PMI composed of the US fell to 52.4 in January from 55.4 in December. The manufacturing PMI rose to 50.1 in January, exceeding the previous reading of 49.4 and exceeding the 49.6 forecast. However, the PMI of Services fell to 52.8 in January from 56.8 in December, being below the expected 56.5.
• However, Trump said Thursday that he wants the Fed to cut the interest rates immediately. “With oil prices going down, I will demand that interest rates go immediately, and in the same way they should be lowering around the world,” Trump said in the World Economic Forum in Davos, Switzerland.
• The US dollar faced challenges since Trump’s comments occurred before the Federal Reserve Monetary Meeting (FED) scheduled for January 28 and 29, with expectations that the US Central Bank will maintain the stable rates.
• Operators expect the FED to maintain its reference rate to one day in the 4.25% -4.50% range at its January meeting. In addition, Trump’s policies could boost inflationary pressures, potentially limiting the Fed to a more rates cut.
• The manufacturing PMI of the China NBS fell to 49.1 in January, from 50.1 in December, not reaching the market expectation of 50.1. Similarly, NBS non -manufacturing PMI decreased to 50.2 in January compared to reading December 52.2. As close business partners, China’s economic performance significantly impacts the Australian economy.
• The Australian dollar also did not obtain support from the new stimulus measures of China to promote the development of indexed investment products, its last effort to revive the weakened variable income market. The Chinese Securities Regulatory Commission (CSRC) has approved a second round of Pilot Investment Programs in long -term shares valued at 52,000 million yuan (7.25 billion dollars).
• China’s industrial profits decreased by 3.3% year -on -year to 7,431.05 billion CNY in 2024, softening from the 4.7% drop recorded in the first 11 months of the year. This marks the third consecutive year of contraction, after a 2.3% decrease in 2023. The continuous recession reflects the ongoing economic challenges, including the weak demand, the increase in deflationary pressures and a prolonged drop in the real estate sector.

Technical Analysis: The Australian dollar proves the 14 -day EMA about 0.6250

The Aud/USD pair quotes about 0.6260 on Tuesday, confined within an ascending channel in the daily chart, which suggests a possible bullish bias. The 14 -day relative force index (RSI) is positioned in the 50 -brand brand, which suggests a neutral market feeling.

The aud/USD torque proves immediate support in the exponential (EMA) mobile average of 0.6256. An additional support is located near the lower limit of the channel around 0.6250.

As for the resistance, the Aud/USD torque could test the nine -day EMA at 0.6266, followed by the key psychological level of 0.6300. A rupture above the latter could reinforce the bullish bias and take the torque to aim to the upper limit of the channel around 0.6360.

AUD/USD: Daily graphic