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AUD/USD Currencies

Australian Dollar Strengthens on Economic Data and Political Advances, US Dollar Under Pressure Before ISM Services PMI

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  • May 5, 2025
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Australian Dollar (AUD) continued to build strength against the US Dollar (USD) based on a mix of favorable economic data and political advances in Australia. Prime Minister Anthony Albanese’s success in being re-elected with a second consecutive three-year term has lifted investors’ confidence, while inflation information such as the TD-MI Inflation Gauge and the Judo Bank Composite PMI exhibited ongoing economic growth. Moreover, a robust trade surplus and favourable retail sales were further bolstering the AUD. While that is happening, the US Dollar has come under pressure from markets waiting for the ISM Services PMI and weighing the role of President Trump’s position regarding Federal Reserve policies and global trade. With the AUD/USD pair trading close to five-month highs, the market continues to await future economic news and geopolitical events for additional guidance. KEY LOOKOUTS • The next US ISM Services PMI will be an important sign of economic wellbeing and may have an effect on the US Dollar direction. The market will be looking for surprises that can move market expectations for Federal Reserve interest rate policy. • Ongoing inflation pressures in Australia, such as the TD-MI Inflation Gauge and the Judo Bank Composite PMI, can shape the Reserve Bank of Australia’s (RBA) monetary policy actions in the future. Market expectations of an impending May rate cut might change pending these developments. • Continued trade negotiations and future tensions between the US and China may bear down on the Australian Dollar, considering Australia’s close trading relationships with China. Any intensification of trade tensions would be detrimental to AUD sentiment. •  Re-election of Prime Minister Anthony Albanese may have an impact on economic policy, including cost-of-living relief, support for renewable energy, and tax cuts. These actions may, however, contribute to inflationary pressure, which will influence the Reserve Bank of Australia’s policy easing room. Australian Dollar (AUD) is set for further strength due to favorable economic indicators and the political stability delivered by Prime Minister Anthony Albanese’s re-election. These key indicators to look out for are the US ISM Services PMI, which may decide the direction of the US Dollar, and Australian inflation pressures, which may drive the Reserve Bank of Australia’s (RBA) interest-rate approach. As well, continuing US-China trade tensions are on high alert status for the AUD due to Australian dependence on trade with China. Albanese’s second term may bring about fresh economic policies, like cost-of-living assistance and tax reductions, although these policies are likely to drive inflation, impacting monetary policy in the future. Investors will be watching closely these events for more information on the AUD/USD forecast. Australian Dollar is strengthening on a backdrop of favorable economic data and Prime Minister Albanese’s re-election, with inflationary pressure and possible US-China trade tensions continuing to pose the biggest risks. Markets will remain attentive to the US ISM Services PMI and the RBA’s reaction to changing economic fundamentals for further guidance. •  The AUD is appreciating against the US Dollar, buoyed by good economic news and political stability after Prime Minister Albanese’s re-election. •  Albanese’s second term in office guarantees a responsible government with an agenda of cost-of-living relief, renewable energy, and healthcare, which may affect inflation. •  The TD-MI Inflation Gauge and the Judo Bank Composite PMI point to accelerating inflation and ongoing economic growth, which could affect the Reserve Bank of Australia’s (RBA) policy. •  Australia’s high trade surplus, rising exports, and growth in retail sales add to the positive AUD sentiment, even though retail sales did not meet expectations. •  The coming US ISM Services PMI will be important in deciding the direction of the US Dollar and might influence Federal Reserve policy expectations. •  Persistent trade tensions and trade negotiations between China and the US might harm the AUD, as Australia has close economic relations with China. •  Markets are anticipating a possible 25-basis-point rate reduction by the RBA in May, driven by both domestic economic conditions and international drivers such as US tariffs, ignoring inflationary pressures. Australian Dollar has been strengthened by upbeat economic news and political stability as a result of the re-election of Prime Minister Anthony Albanese. His election has lifted investor optimism with the pledge of a government committed to tackling cost-of-living, renewable energy, and prioritizing health and tax cuts. These policies, as much as they are good for the people, may also generate inflationary pressures and hinder the Reserve Bank of Australia in reducing interest rates in the near term. AUD/USD DAILY CHART PRICE CHART SOURCE: TradingView In addition to political stability, economic figures for Australia have also been positive. The nation experienced a strong trade surplus as well as an increase in retail sales, although this fell slightly short of projections. With inflationary pressures building, the Australian economy continues to grow, underpinned by upbeat business attitudes as well as robust export performance. Meanwhile, external factors such as the US’s stance on trade with China and the possible effect of future US economic reports may also dictate global market sentiment, making the performance of AUD an interest to monitor in the next few weeks. TECHNICAL ANALYSIS The AUD/USD pair is holding a bullish inclination, trading near 0.6460 and staying above the nine-day Exponential Moving Average (EMA), indicating continued upward momentum. The 14-day Relative Strength Index (RSI) is still well above 50, further affirming the robustness of the prevailing trend. On the higher side, the pair may reach the five-month high of 0.6515, while the psychological mark of 0.6600 is also possible. The initial support comes in the form of the nine-day EMA at 0.6408, followed by the 50-day EMA at 0.6326. A break below these levels could undermine the bullish forecast, leaving the pair vulnerable to lower levels like 0.5914, the lowest level since March 2020. FORECAST Australian Dollar can be anticipated to continue its rally in the near term, potentially reaching the five-month high of 0.6515. Positive economic data from Australia, such as robust trade figures, retail sales, and ongoing growth in business activity, form a strong basis for further

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AUD/USD Currencies

Australian Dollar Under Pressure as US-China Trade Tensions and Global Economic Sentiment Weigh In

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  • April 11, 2025
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The Australian Dollar (AUD) continues to be under pressure as rising US-China trade tensions and soft global economic signals continue to bear down on investor sentiment. The White House confirmation that US tariffs on Chinese imports have risen to 145% has further fueled risk aversion, hurting the AUD because of Australia’s high trade exposure with China. Although the AUD was given temporary support by reports of renewed trade talks with the European Union, subdued local sentiment and forecasts of Reserve Bank of Australia interest rate cuts still weigh on its outlook. The US Dollar also has headwinds to contend with from softening inflation and general doubts regarding economic growth, keeping the AUD/USD currency pair highly volatile around significant technical levels. KEY LOOKOUTS • The series of ongoing tariffs increases and trade barriers between the US and China remains a major threat to the Australian Dollar, as Australia has close trade connections with China. • Markets are factoring in as much as 100 basis points of rate cuts by the Reserve Bank of Australia from May, which has the potential to put additional pressure on the AUD if it materializes. •  The US Producer Price Index (PPI) and Michigan Consumer Sentiment figures will determine USD strength and, consequently, the AUD/USD exchange rate. •  The AUD/USD is trading around 0.6190, supported by the 9-day EMA (0.6167) and capped by the 50-day EMA (0.6260). A break in either direction may determine the short-term trend. Investors are scrutinizing closely a handful of important variables that have the potential to define the near-term path of the Australian Dollar. The escalating US-China trade war, characterized by high tariff increases and retaliatory actions, remains a strong burden on the AUD because of Australia’s trade reliance on China. Simultaneously, rate cut expectations from the Reserve Bank of Australia are contributing to the currency’s negative outlook, with markets predicting a dovish turn as soon as May. Globally, focus shifts to coming US economic data such as the PPI and consumer sentiment figures that could drive the US Dollar and in turn the AUD/USD. Technically, the pair’s position close to key moving averages implies volatility in the offing with support at 0.6167 and resistance around 0.6260 set to dictate market direction. The Australian Dollar is under downward pressure due to heightened US-China trade tensions and RBA rate-cut expectations. Market direction in the near term is sought by traders in terms of key US economic statistics and technical thresholds at 0.6167 and 0.6260. • The US imposed additional tariffs of 145% on Chinese products, fueling the trade war and affecting global trade patterns. • Australia’s strong trade relationship with China exposes its economy and currency to being affected by disruption in China’s trade landscape. • China responded by boosting tariffs on 84% of US imports and blacklisting six US firms, ratcheting up trade tensions. • Australia will resume trade talks with the European Union with the objective of deepening and diversifying its trade relationships. • China showed interest in further developing trade and investment relationships with the EU as it pursues stability against increasing US tensions. • Sluggish consumer and business confidence is driving anticipation of a dovish move from the Reserve Bank of Australia. • Easing inflation and mixed economic data in the US are contributing to uncertainty and conservative market sentiment on the global stage. The Australian Dollar is under sustained pressure as tensions in international trade rise, especially between China and the United States. The announcement by the White House that US tariffs on Chinese exports have risen to 145% has increased anxiety on international trade stability. The issue is particularly pertinent for Australia, considering that it has strong economic relations with China. The ongoing conflict instills apprehension about diminished demand for Australian exports, leading to a conservative outlook for the currency. AUD/USD DAILY PRICE CHART CHART SOURCE: TradingView Domestically, Australian consumer and business confidence is underpinned by weak sentiment, which supports the view that the Reserve Bank of Australia might pursue a more dovish monetary policy stance in the months ahead. In the US, meanwhile, inflation data provided indicators that eased, while policymakers there are also watchful about striking a balance between growth and price stability. As global and local uncertainties are played out, markets will be keeping a keen eye on economic resilience signs and central bank policy reactions globally. TECHNICAL ANALYSIS The AUD/USD pair is trading close to 0.6190 with limited momentum as it continues to range about vital short-term moving averages. While the pair had a momentary respite, indicators point to the fact that market sentiment is still guarded. The Relative Strength Index (RSI) is languishing beneath the neutral 50 mark, signaling that there is no strong bullish sentiment. A protracted move in either direction might determine the direction for the next leg, with traders keeping a close eye on confirmation signs from wider market indicators and economic data. FORECAST Australian Dollar might get some support if Australia can restart trade talks with the European Union successfully, which would be a possible investment sentiment booster. Encouraging trends in China’s bid to increase trade with the EU could also calm regional trade sentiment, positively affecting the AUD indirectly. In addition, if US economic releases later this week fail to impress or if the Federal Reserve provides hints of a more conservative strategy in tightening, the US Dollar could lose strength, allowing space for a slight rebound in the AUD/USD pair. The Australian Dollar could experience more downward pressure in the short term because of the increasing tensions between China and the US, which threaten Australia’s export-oriented economy. With China raising tariffs on US products and blacklisting US businesses, the uncertainty in global trade could limit demand for Australian commodities. Moreover, poor local sentiment and increased expectations of rate cuts by the Reserve Bank of Australia may add to the drag on the AUD, leaving it exposed to falling if global risk aversion continues to intensify.

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AUD/USD Currencies

Australian Dollar Remains Steady Despite Budget Release and Global Economic Unrest

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  • March 25, 2025
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The Australian Dollar stabilised after Treasurer Jim Chalmers’ release of the 2025/26 budget, which outlined anticipated deficits of A$27.6 billion in 2024-25 and A$42.1 billion in 2025-26, in addition to tax cuts to spur economic stimulus. The Reserve Bank of Australia’s restraint regarding interest rates and anticipation of Chinese stimulus both lent further support to the AUD. Nonetheless, cross-border uncertainties, such as President Trump’s US trade policies and inconsistent US economic statistics, remain possible threats. In the meantime, technical markers indicate the AUD/USD exchange rate is under stress, trending below significant levels of resistance within continuing market turmoil. KEY LOOKOUTS • The tax cuts and economic projections of the Australian government can shape investor optimism and market stability. • The Reserve Bank of Australia’s conservative approach to rate cutting and its reaction to inflation and international economic trends will be pivotal for the movement of the AUD. • Any possible tariff announcements by President Trump and how these will affect global trade, specifically Australia’s trading relationship with China and the US, may cause volatility. •The currency pair is still below major resistance at 0.6300, with support at 0.6220; a break above or below these levels may indicate the direction of the next market move. The Australian Dollar’s stability after the 2025/26 budget announcement is indicative of cautious optimism, but major factors may determine its path in the weeks ahead. The Reserve Bank of Australia’s interest rate stance continues to be a major focus, as investors weigh the chances of further policy changes. At the same time, worldwide trade tensions, especially possible US tariff announcements, may also weigh on market sentiment and the economic prospects of Australia. Of course, technical levels of resistance around 0.6300 and support at 0.6220 will also be observed closely, as a break through in either direction may indicate the next significant move for the AUD/USD pair. The Australian Dollar is stable following the budget announcement for 2025/26, with investors waiting for tax reductions and economic projections. RBA’s interest rate policy and possible US tariff implications may influence market sentiment. Technical resistance of 0.6300 and support of 0.6220 will be points of interest for AUD/USD action. • The budget for 2025/26 involves tax reductions and economic projections, with a budget deficit of A$42.1 billion for 2025-26. • The Aussie remains firm, helped by RBA holding rates and possible Chinese stimulus. • The Reserve Bank of Australia’s cautiousness towards rate cuts continues to be a leading driver of the AUD. • Looming uncertainty regarding possible tariff announcements from President Trump may generate volatility across markets worldwide. • US Services PMI jumped to 54.3, bolstering the US Dollar, while Manufacturing PMI was lower than forecasted. • Resistance at 0.6300 and support at 0.6220 will be key to deciding the pair’s next direction. • Beijing’s proposals to enhance consumption and wages would indirectly assist the Australian economy because of robust trade links. The Australian Dollar held firm after Treasurer Jim Chalmers delivered the 2025/26 budget that provided significant economic predictions, such as tax relief intended to ease money woes for households. The budget estimates a 2024-25 deficit of A$27.6 billion and A$42.1 billion for 2025-26, as the government aims to balance economic growth with fiscal prudence. Moreover, the GDP of Australia is predicted to expand by 2.25% in 2026 and 2.5% in 2027, indicating modest economic growth. The Reserve Bank of Australia (RBA) remains cautious in its interest rate moves, keeping inflation under control while fostering economic stability. AUS/USD DAILY PRICE CHART CHART SOURCE: TradingView The Australian Dollar maintained its calmness after Treasurer Jim Chalmers presented the 2025/26 budget that made important economic projections, such as the reduction of tax that would help alleviate financial burdens on households. The budget forecasts a deficit of A$27.6 billion for 2024-25 and A$42.1 billion for 2025-26, which shows that the government is striking a balance between economic growth and fiscal prudence. Moreover, Australia’s GDP is projected to increase by 2.25% in 2026 and 2.5% in 2027, indicating moderate economic growth. The Reserve Bank of Australia (RBA) remains cautious in its interest rate policy, keeping inflation under control while maintaining economic stability. TECHNICAL ANALYSIS The AUD/USD currency pair is trading around 0.6290, with technical indicators indicating a cautious market mood. The currency pair continues to be in a bearish trend and trades in a falling channel. The 14-day Relative Strength Index (RSI) is at a level slightly below 50, which means the currency has weak momentum. The important support remains at 0.6220 and breaking below this may drag the pair towards its seven-week low of 0.6187. Resistance on the upside comes at 0.6308 (nine-day Exponential Moving Average) and 0.6310 (50-day EMA). A breakout above these levels may signal short-term bullish momentum, while continued rejection at resistance may reinforce the prevailing downtrend. FORECAST The outlook for the Australian Dollar is mixed and dependent on both local and international considerations. To the upside, solid economic fundamentals from Australia, such as better Manufacturing and Services PMI reports, can underpin the AUD. Also, hopes of further stimulus from China, Australia’s biggest trading partner, could increase demand for Australian exports, supporting the currency. If the Reserve Bank of Australia continues to be cautious on interest rates without hinting at aggressive cuts, investor sentiment in the AUD might stay firm. A move above key technical resistance levels at 0.6310 could pave the way for more gains in the near term. But downside risks remain as uncertainty regarding US trade policies hangs in the air. Possible tariff announcements by President Trump have the potential to upset global trade and hurt risk-sensitive currencies such as the AUD. The US Dollar is also supported by robust Services PMI data and dovish comments from Federal Reserve officials, which could cap the AUD’s upside. If the AUD/USD currency pair is unable to sustain support at 0.6220, then further losses towards 0.6187 may be anticipated, supporting a bearish trend in the short term.

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AUD/USD Currencies

Australian Dollar Falters as US Dollar Strength and Rising Global Tensions Intensify

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  • March 18, 2025
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The Australian Dollar (AUD) continues to struggle as the US Dollar (USD) strengthens on the back of rising geopolitical tensions and poor US economic data. Heightened fears of Middle East conflicts, possible trade disruptions, and aggressive US tariff policies by President Donald Trump have shaken global markets, lifting safe-haven demand for the USD. While the Reserve Bank of Australia (RBA) remains optimistic about cuts in interest rates in the future, providing some boost to the AUD, stimulus measures by China provide some cushioning for the Aussie Dollar. Although trade anxieties on the horizon and softer US retail data remain dampeners for investor moods. KEY LOOKOUTS • Increasing Middle East tensions and assertive US policy measures continue to drive safe-haven demand for the US Dollar, exerting downward pressure on the Australian Dollar. • The Reserve Bank of Australia’s reluctance to cut interest rates could give the AUD temporary support, depending on inflation patterns and world economic conditions. • Optimism from China’s consumption-stimulating measures could be a boon to the AUD, considering Australia’s robust trade relations with China. • The AUD/USD currency pair can test the crucial resistance level of 0.6408. A break can reach 0.6480, and strong support is found at 0.6330 and 0.6311. The Australian Dollar (AUD) is under a challenging trading scenario with increasing geopolitical tensions and the US Dollar (USD) strengthening, bolstered by safe-haven demand and threats of tariffs from the Trump administration. Though soft US economic data, including disappointing retail sales and weakening consumer sentiment, put a cloud of uncertainty over the outlook for the USD, the AUD is under pressure from worries of global trade dislocation and Australia’s exposure to commodity markets. Nevertheless, the Reserve Bank of Australia’s prudent stance on cutting interest rates and China’s recent stimulus package targeting consumption provide some glimmer of support for the Aussie. Technical levels indicate a possible bullish shift in the AUD/USD, but future upside will rely on global risk appetite and core economic events ahead. The Australian Dollar is still pressured as the US Dollar consolidates its gains on renewed geopolitical tension and uncertainty about trade. Yet, prudent RBA policy and China’s economic stimulus offer support. Market attention now turns to significant technical levels and prospective economic indicators. • The Australian Dollar weakens as geopolitical tensions drive demand for the safe-haven US Dollar. • RBA Assistant Governor Sarah Hunter gives a nod towards cautiousness with future rate cuts. • Dismal US Retail Sales and weaker consumer sentiment place pressure on the USD outlook. • US President Trump’s proposed reciprocal tariffs and no exemption for steel and aluminum affect Australia’s trade outlook. • China’s specific action plan to stimulate consumption provides regional market assistance, supporting the Aussie Dollar. • AUD/USD is traded around 0.6380, with possibilities to test the resistance at 0.6408 and trend towards 0.6480. • The investors are careful as the ongoing global economic and political events are still driving currencies. The Australian Dollar is under pressure as geopolitical tensions rise, especially in the Middle East, where the US has reasserted its military presence. The increased global uncertainty has fueled demand for the US Dollar, which is commonly regarded as a safe-haven asset during periods of crisis. Concurrently, economic issues in the US, including soft retail sales and a precipitous decline in consumer sentiment, have created an additional layer of sophistication in overall market sentiment. Though these contribute to market volatility, the general global backdrop still plays a role in currency movements, including the AUD. AUD/USD Daily Price Chart Chart Source: TradingView Domestically, the Reserve Bank of Australia (RBA) has adopted a conservative view regarding future interest rate reductions, hinting at a more prudent strategy than what the markets had predicted. This occurs as Australia’s trade environment is also under threat from the US administration’s refusal to remove tariffs on Australian steel and aluminum exports. But recent Chinese efforts to trigger its economy—like increasing household consumption and stabilizing markets—provide a glimmer of hope for Australia’s economy, considering China’s vital position as an important trading partner. TECHNICAL ANALYSIS AUD/USD pair still has a bullish tilt as it still moves in an upward channel in the daily chart. The currency pair is presently trading close to 0.6380, and the impetus is buoyed by the 14-day Relative Strength Index (RSI) being sustained above the 50 level, which shows strength on the buy side. In case the pair continues to go higher, it could try and test the new high close to 0.6408. However, levels of support close to 0.6330 and 0.6311 are pivotal; a break below these might spell a change in trend and usher in more downward pressure. FORECAST If sentiment in the market is bullish and geopolitical tensions between nations become less, the Australian Dollar may recover strength, provided that China’s economic stimulus initiatives begin to yield more positive results. Increased stability globally, along with a prudent but consistent monetary policy by the Reserve Bank of Australia, could be a basis for AUD recovery. Moreover, if future US economic data continues to underperform, it may devalue the US Dollar and lend support to a bullish trend in the AUD/USD currency pair. Strong commodity demand and positive risk appetite can further drive the Aussie higher in the short term. On the bearish side, the Australian Dollar is exposed to sustained geopolitical tensions and escalating global uncertainties, especially with regards to US trade policies and military aggressions. Continued resilience of the US Dollar, fueled by safe-haven flows and possible policy changes by the Federal Reserve, may put further pressure on the AUD. Additionally, if the recovery in China slows down or Australia continues to encounter more trade-related issues, the AUD might not be able to gain strength, making a decline in the AUD/USD pair more likely. 

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AUD/USD Currencies

Australian Dollar Falls in Face of Trade Tensions and China Deflation Fears Amid Consumer Confidence Bounce

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  • March 11, 2025
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The Australian Dollar continues to fall against the US Dollar, burdened by rising global trade tensions and worsening deflationary fears in China—Australia’s biggest trading partner. Even with a big bounce in Westpac Consumer Confidence to a three-year high, fueled by recent interest rate reductions and softening living expenses, the AUD can’t find its footing. Stagnated US-China trade talks, counter-tariffs, and waning Chinese demand have weighed on sentiment, as weaker US employment data and fears of recession further clouded the wider picture. With investors expecting crucial inflation reads and other direction from central banks, the AUD/USD continues to be battered, trading around multi-week lows. KEY LOOKOUTS • Markets watch intently for the Reserve Bank of Australia’s next step, particularly after robust numbers trimmed expectations of further rate easing. • Continuing deadlock in US-China trade negotiations and fresh retaliatory tariffs continue to influence Australian market sentiment and global risk appetite. • Accelerating deflationary pressure in China is a significant threat to Australia’s export-oriented economy, particularly in the context of slowing consumer demand after Spring Festival. • Market participants are waiting for US inflation figures, which would potentially affect Federal Reserve policy expectations and propel short-term AUD/USD movements. The Australian Dollar continues to come under pressure as rising global trade tensions and China’s worsening deflation feed fears about Australia’s economic prospects. Amid a significant rise in consumer sentiment—reflected in Westpac’s Consumer Confidence Index hitting a three-year high—the external headwinds continue to dominate local optimism. The US-China trade impasse extended over time, joined by retaliatory tariffs and waning demand in China, has quashed investor sentiment and risk appetite. At the same time, technical indicators point to bearish momentum for AUD/USD, with investors looking for significant US inflation data and further information about the Reserve Bank of Australia’s monetary policy direction. The Australian Dollar remains under pressure even after consumer confidence rose, as global trade tensions and deflation concerns in China act as a dampener for sentiment. US-China negotiations’ stalemate and declining risk appetite keep the AUD/USD pair around multi-week lows. • Australian Dollar continues to be under pressure as a result of escalating global trade tensions and China’s increasing deflation worries. • Westpac Consumer Confidence jumped 4% in March, a three-year high, driven by interest rate reductions and softening living expenses. • US-China trade talks continue to be at an impasse, with retaliatory tariffs further weighing on market sentiment and affecting Australia’s export-oriented economy. • Deflation in China indicates poor domestic demand, which threatens Australian exports and general economic prospects. • Uncertainty around the US economy continues, with poor jobs numbers and recession worries driving global currency flows. • RBA remains cautious in its policy, and recent economic news has lowered the expectation of further rate cuts. • Market players wait for the next US inflation figures, which may influence future Federal Reserve policies and affect the AUD/USD exchange rate. The Australian Dollar is strained as global trade tensions escalate and economic uncertainty rises, driven particularly by increasing deflation fears in China—Australia’s biggest trading partner. While consumer sentiment improved significantly, with Westpac Consumer Confidence reaching a three-year high, overall market sentiment remains cautious. The Reserve Bank of Australia’s recent rate cut and alleviation of cost-of-living pressures have improved domestic optimism, but external threats continue to loom over local economic gains. AUD/USD Daily Price Chart Chart Source: TradingView Impeded US-China trade talks and retaliatory tariffs are driving fears of a weakening global demand, which directly affects Australia’s trade-dependent economy. In the background, political events and soft US job data are influencing expectations for future economic policy. As investors continue to keep an eye on future inflation data and central bank cues, the Australian Dollar’s performance will tend to be guided by these changing global dynamics. TECHNICAL ANALYSIS Australian Dollar is exhibiting signs of ongoing weakness versus the US Dollar, with the AUD/USD pair trading around significant support levels. The pair has fallen below the nine-day Exponential Moving Average (EMA), which signals bearish short-term momentum. Moreover, the 14-day Relative Strength Index (RSI) has dipped below the neutral 50 level, indicating mounting selling pressure. If the downtrend continues, the pair would test lower support levels, while recovery would demand a persistent break above the near-term resistance zones to turn sentiment again in the bullish direction. FORECAST In the event that global sentiment is improving and US-China trade tensions abate, the Australian Dollar would recover, particularly if China’s economic data begin to stabilize. A flip in commodity demand to the positive or an unexpected pick-up in China’s inflation rates can drive Australia’s export economy, potentially pushing the AUD higher. Furthermore, if the Reserve Bank of Australia continues its dovish but accommodative policy without additional rate cuts, this should reinforce investor confidence and support a modest recovery in the currency. But the risks on the downside are also considerable. Ongoing trade uncertainty, ongoing deflationary pressures in China, or additional escalation in global tariff tensions would bear down on the Australian Dollar. If future US inflation numbers bolster the argument for the Federal Reserve to keep or postpone rate cuts, the US Dollar could gain further traction, putting further pressure on the AUD. In addition, any fresh weakness in Australian economic data or a turn towards more dovish RBA commentary may speed the currency’s decline in the near term.

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AUD/USD Currencies

Australian Dollar Remains Unchanged After RBA Rate Cut: Market Response and Future Projections

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  • February 18, 2025
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The Australian Dollar has remained unchanged after the Reserve Bank of Australia’s (RBA) equally expected move of reducing the Official Cash Rate by 25 basis points to 4.10%, its first rate cut in four years. Although RBA Governor Michele Bullock acknowledged the effect of high interest rates, she warned against presuming additional rate cuts. The AUD/USD currency pair was supported by a softer US Dollar, with downtrodden US retail sales and Federal Reserve officials being cautious on rate cuts. At the same time, the rise in US Treasury yields supported the US Dollar, making it tough for the Australian Dollar. The market sentiment remains centered around significant support and resistance levels, with AUD/USD supporting an uptrend channel, indicating a positive bias.  KEY LOOKOUTS • Governor Michele Bullock indicated doubt regarding additional rate cuts, with future economic data being pivotal in deciding the next step by the central bank. • Fed officials emphasize caution on rate cuts with inflation worries, with US economic data being pivotal in informing future monetary policy. • Increasing US Treasury yields may make the US Dollar stronger, potentially capping AUD/USD gains despite the Australian Dollar’s strength following the RBA decision. • The duo is bullish in an uptrend channel, testing resistance at 0.6400 while important support is close to the 14-day EMA at 0.6300. Australian Dollar stability after the RBA’s rate cut confirms the market’s expectation of the move, and traders are now looking to see what future policy steps are ahead. While RBA Governor Michele Bullock hinted at indecision about further reductions, US Federal Reserve officials stuck to a wait-and-see approach, pointing to ongoing inflation threats. Increases in US Treasury yields have underpinned the US Dollar, which has made headwinds for AUD/USD even in its bullish path within an upward channel. The Australian Dollar held firm following the RBA rate cut, with investors looking to policy cues in the future. The increase in US Treasury yields, on the other hand, supported the US Dollar and proved difficult for AUD/USD. • The Reserve Bank of Australia lowered its Official Cash Rate by 25 basis points to 4.10%, the first rate cut in four years. • The Australian Dollar did not react much since the rate cut decision had already been priced in by traders before the announcement. • Governor Michele Bullock highlighted that additional rate cuts are in doubt, mentioning robust employment and persistent inflation issues. • Higher US Treasury yields supported the US Dollar, placing downward pressure on AUD/USD even after its post-RBA bounce. • Fed officials flashed warning signals for rate cuts, citing inflation threats and calling for greater economic clarity. • AUD/USD is still in an uptrend channel, with important resistance at 0.6400 and firm support at 0.6300. • US retail sales figures, Federal Reserve actions, and China’s economic policy are still driving Australian Dollar market sentiment. The Australian Dollar stabilized after the Reserve Bank of Australia (RBA) as anticipated cut the Official Cash Rate by 25 basis points to 4.10%. RBA Governor Michele Bullock insisted that although high interest rates have touched the economy, it is still premature to speculate about more cuts in interest rates. The Australian “Big Four” banks of CBA, NAB, ANZ, and Westpac also followed by cutting their lending rates promptly. The most recent inflation figures reported a deceleration in price pressures as Trimmed Mean CPI increased 0.5% last quarter, down from the anticipated 0.6%. Non with standing this, the robust labor market and conservative RBA approach mean that another round of rate cuts is not certain, keeping market participants on their toes for subsequent economic releases. AUD/USD Daily Price Chart TradingView Prepared by ELLYANA At the same time, US Dollar found strength in increasing Treasury yields, curbing AUD/USD’s up potential. The Federal Reserve still holds back on reducing interest rates, with policymakers citing ongoing inflation threats and desiring greater certainty before altering monetary policy. The USD was dented by dismal US retail sales figures temporarily before AUD/USD could recover partially. Still, with the US Dollar Index (DXY) rallying and Treasury yields on the rise, the Australian Dollar has resistance around 0.6400. The pair currently is trading inside an upward trend channel, important support being in place at about 0.6300, making economic statistics in the pipeline as well as remarks by the central banks crucial to its immediate next direction. TECHNICAL ANALYSIS AUD/USD pair trades in an uptrend channel, signifying the overall market bullish tendency in the near term. The pair also received support around the nine-day Exponential Moving Average (EMA) of 0.6316 and the 14-day EMA of 0.6300. The Relative Strength Index (RSI) is still above the 50 mark, indicating positive momentum. The pair meets resistance on the upside around the top edge of the channel at 0.6390, with an important psychological level at 0.6400. A breach above the level would herald more gains, while a decline below the support line of approximately 0.6280 may suggest a reversal. Investors will be looking out for these key levels for indication of a trend breakdown or a breakout. FORECAST The Australian Dollar remains in a bullish bias as long as it continues to trade in its rising channel, with the next resistance being at 0.6390 and the critical psychological level of 0.6400. If the pair is able to break above 0.6400, this may set further upside momentum into play, the next target being at 0.6450. Supportive reasons for the upward movement are a soft US Dollar, which could come under stress if economic indicators indicate that the Federal Reserve might ease monetary policy ahead of time. Also, any indication of strength in the Australian economy, especially in labor market data or inflation management, could support the AUD and bring further advances. AUD/USD has critical support at 0.6316 (nine-day EMA) and 0.6300 (14-day EMA). A breakdown below these levels may drive the pair to 0.6280, which is the lower end of the ascending channel. In case of a further increase in selling pressure, the next key support is at

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