- The Australian dollar gains ground in the midst of a cautious tone on the policy perspectives of the RBA.
- The Governor of the RBA, Bullock, warned that high unit labor costs and low productivity could boost inflation above the current forecasts.
- Trump announced a tariff rate of 35% for the imported goods of Canada.
The Australian dollar (AUD) is prepared to continue its winning streak for the fourth consecutive session against the US dollar (USD) on Friday, after recovering their daily losses. However, the Aud/USD torque faced challenges after the introduction of new tariff actions by US President Donald Trump. President Trump announced on Thursday a tariff rate of 35% for the imported goods of Canada, which will enter into force on August 1. In addition, he declared that the European Union (EU) would receive a letter notifying the new tariff rates “today or tomorrow”.
The AU receives support after the Bank of the Australian Reserve (RBA) decided surprisingly to maintain the official cash (OCR) rate at 3.85% earlier this week. The governor of the RBA, Michele Bullock, said that the risks of inflation persist, driven by the high unit labor costs and low productivity, which could push inflation above forecasts. In addition, the Vice Governor of the RBA, Andrew Hauser, mentioned that the global economy faces uncertainty. Hauser also declared that the effects of tariffs on the global economy are deep and probably affect growth.
The Australian dollar gains ground despite the new tariff concerns
- The US dollar index (DXY), which measures the value of the US dollar (USD) compared to six main currencies, extends its profits for the second consecutive day and is quoted around 97.80 at the time of writing.
- The president of the Bank of the Federal Reserve of Chicago, Austan Goolsbee, said Thursday night that he does not support the arguments that the US Central Bank should cut rates to make the cheapest government debt, the mandate is in jobs and prices.
- President Trump presented a new wave of tariff demand letters on Wednesday, which generated concerns about a renewed global commercial war. The avalanche of additional tariff cards and threats marked the last turn on a fast movement commercial agenda that has fed market volatility.
- The minutes of the Federal Open Market Committee (FOMC) of the June 17-18 meeting, published on Wednesday, indicated that those responsible for the policy largely maintained a waiting position regarding future decisions about interest rates.
- President Trump said Tuesday that he will announce a 50% tariff on imported copper and indicated that more severe sector levies are coming. Trump also said that he will soon announce tariffs “at a very, very high rate, like 200%”, about pharmaceutical imports.
- The US Treasury Secretary, Scott Besent, said that the United States has already received around 100,000 million dollars in tariff revenues this year and could see that this total increases at 300,000 million dollars by the end of 2025, promoted by commercial measures on the climbing of President Donald Trump.
- The White House announced Monday night that President Donald Trump has signed an executive order delaying the implementation of new tariffs from July 1 to August 1, according to Bloomberg. Trump renewed his threat of a 25% tax on imports from Japan and South Korea and shared a lot of other letters to world leaders warning about taxes as of August 1. Trump also imposed 25%rates to Malaysia, Kazakhstan and Tunisia, while South Africa will see a 30%tariff, and Laos and Burma will face a 40%tax. Other nations affected by taxes include Indonesia with a 32%rate, Bangladés with 35%, and Thailand and Cambodia with 36%rights.
- Trump published on social networks on Monday that “any country that aligns with BRICS anti -American policies, an additional 10%tariff will be charged. There will be no exceptions to this policy.”
- The China consumer price index rose 0.1% year -on -year in June after 0.1% in May has fallen. The market consensus was 0% in the informed period. Meanwhile, the monthly IPC decreased 0.1% compared to the expected reading of 0%. In addition, the production price index (IPP) fell 3.6% year -on -year in June, after a 3.3% drop in May. The data were lower than the 3.2%market consensus. Any change in the Chinese economy could impact the AU, since China and Australia are nearby commercial partners.
- Financial Times reported that China is increasingly redirecting its exports through Southeast Asia to avoid tariffs imposed by the Trump administration. Direct shipments from China to the US fell 43% in May, while China’s total exports increased 4.8%. This change was marked by an increase of 15% in exports to Southeast Asia and an increase of 12% to the European Union (EU). However, the US trade agreement with Vietnam now includes a 40% tariff on traffic goods to stop such practices.
- The Reuters survey showed that 30 analysts predicted that the Bank of the Australian Reserve will cut the cash rate at 25 basic points to 3.60% in August. The four main banks of Australia, Anz, CBA, NAB and Westpac, also support the rate cut.
- The Australian treasurer, Jim Chalmers, said that the decision of the Bank of the Australian Reserve of maintaining the rates was not the result that millions of Australians expected or what the markets anticipated. Chalmers added that the Central Bank has indicated a clear direction on inflation and interest rates in the future.
The Australian dollar reaches new maximum of eight months about 0.6600
The AUD/USD is quoted around 0.6590 on Friday. The technical analysis of the daily graphic indicated a persistent bullish feeling, since the torque is maintained within the ascending channel pattern. The 14 -day relative force index (RSI) is positioned above the 50th mark, strengthening the bullish bias. In addition, the pair has moved slightly above the nine -day exponential (EMA) mobile average, indicating that the impulse of the short -term price is being strengthened.
On the positive side, the aud/USD torque has reached its new maximum of eight months of 0.6595 on Friday. A rupture above this level could strengthen the bullish bias and open the doors so that the torque explores the region around the upper limit of the ascending channel about 0.6680.
The Aud/USD torque could try its initial support in the nine -day EMA of 0.6555. A successful rupture below this level would weaken the feeling of the market and exert down pressure over the torque to test the lower limit of the upward channel around 0.6520, followed by the 50 -day EMA at 0.6484.
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 Japanese yen.
| USD | EUR | GBP | JPY | CAD | Aud | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.23% | 0.16% | 0.47% | 0.29% | -0.04% | 0.12% | 0.11% | |
| EUR | -0.23% | -0.08% | 0.26% | 0.05% | -0.20% | -0.13% | -0.12% | |
| GBP | -0.16% | 0.08% | 0.34% | 0.12% | -0.11% | -0.00% | -0.07% | |
| JPY | -0.47% | -0.26% | -0.34% | -0.19% | -0.54% | -0.40% | -0.40% | |
| CAD | -0.29% | -0.05% | -0.12% | 0.19% | -0.28% | -0.19% | -0.19% | |
| Aud | 0.04% | 0.20% | 0.11% | 0.54% | 0.28% | 0.22% | 0.07% | |
| NZD | -0.12% | 0.13% | 0.00% | 0.40% | 0.19% | -0.22% | -0.05% | |
| CHF | -0.11% | 0.12% | 0.07% | 0.40% | 0.19% | -0.07% | 0.05% |
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).
Australian dollar – frequent questions
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.
