- The Australian Dollar could lose ground as rising global trade tensions dampened investors’ risk appetite.
- The AUD finds support from stronger-than-expected GDP growth and robust trade data from Australia.
- San Francisco Fed President Mary Daly noted that rising uncertainty among businesses could dampen demand in the US economy.
The Australian Dollar (AUD) rebounded on Monday, recovering losses from the previous two sessions against the US Dollar (USD). The AUD/USD pair's upward movement was primarily driven by concerns over a potential slowdown in the US economy.
The upside of the AUD/USD pair could be limited as rising global trade tensions dampened investors’ risk appetite. China's retaliatory tariffs on certain US agricultural products went into effect today, in response to last week's US tariff increase from 10% to 20% on Chinese imports, given China’s role as Australia’s largest trading partner.
The Aussie Dollar received support from stronger-than-expected GDP growth and trade data from Australia released last week. On the monetary policy front, the latest Reserve Bank of Australia (RBA) Meeting Minutes indicated caution regarding further interest rate cuts, clarifying that February’s rate reduction does not signal a commitment to continued easing.
Moreover, China announced on Saturday that it will impose a 100% tariff on Canadian rapeseed oil, oil cakes, and peas, along with a 25% levy on aquatic products and pork from Canada. The move comes as retaliation against tariffs introduced by Canada in October, escalating trade tensions. This marks a new front in a broader trade conflict largely driven by US President Donald Trump's tariff policies. The tariffs are set to take effect on March 20.
Australian Dollar appreciates as US Dollar declines amid concerns over US economy
- The US Dollar Index (DXY), which measures the US Dollar against six major currencies, is losing ground for the fifth consecutive day, trading around 103.80 at the time of writing. However, the downside of the Greenback could be limited as the US Treasury yields rise.
- The US Bureau of Labor Statistics (BLS) showed on Friday that Nonfarm Payrolls (NFP) increased by 151,000 in February, falling short of the expected 160,000. January’s job growth was also revised downward to 125,000 from the previously reported 143,000.
- San Francisco Fed President Mary Daly stated late Sunday that increasing uncertainty among businesses could weaken demand in the US economy but does not warrant a change in interest rates. Daly noted that business leaders in her district are expressing growing concerns about the economy and policy, which research indicates could dampen demand.
- US Commerce Secretary Howard Lutnick stated on Sunday that the 25% tariffs, imposed by President Donald Trump in February, on steel and aluminum imports, set to take effect on Wednesday, are unlikely to be postponed, according to Bloomberg. While US steelmakers have urged Trump to maintain the tariffs, businesses reliant on these materials may face increased costs.
- President Trump stated on Sunday that he anticipates a positive outcome from the US discussions with Ukrainian officials in Saudi Arabia. Trump also mentioned that his administration has considered lifting an intelligence pause on Ukraine, is evaluating various aspects of tariffs on Russia, and is not worried about military exercises involving Russia, China, and Iran, according to Reuters.
- Australia’s GDP grew by 0.6% quarter-over-quarter in the fourth quarter of 2024, surpassing Q3’s 0.3% expansion and beating market expectations of 0.5%. On an annual basis, GDP climbed to 1.3% in Q4 from 0.8% in the prior quarter.
- Australia’s trade surplus rose to 5,620 million in January, surpassing the expected 5,500 million and improving from the previous 4,924 million (revised from 5,085 million). Exports climbed 1.3% month-over-month from the prior month, reaching an 11-month high driven by non-monetary gold. Meanwhile, imports declined by 0.3% MoM, following a sharp 5.9% increase in the previous month, according to the Australian Bureau of Statistics.
- Reserve Bank of Australia (RBA) Deputy Governor Andrew Hauser highlighted that global trade uncertainty is at a 50-year high. Hauser warned that uncertainty stemming from US President Donald Trump's tariffs could prompt businesses and households to delay planning and investment, potentially weighing on economic growth.
- China’s Consumer Price Index fell by 0.7% year-over-year in February, exceeding market expectations of a 0.5% decline and reversing the 0.5% increase recorded in the previous month. This marks the first instance of consumer deflation since January 2024, driven by weakening seasonal demand after the Spring Festival in late January. On a monthly basis, CPI inflation stood at -0.2% in February, down from January’s 0.7% and softer than the expected -0.1%.
- China's Producer Price Index (PPI) declined by 2.2% year-over-year in February, slightly exceeding market expectations of a 2.1% drop. This follows a 2.3% decrease in the previous two months and represents the slowest decline since August 2024.
Technical Analysis: Australian Dollar tests nine-day EMA near 0.6300
AUD/USD is trading near 0.6320 on Monday, with technical analysis of the daily chart indicating the pair remains slightly above the nine-day Exponential Moving Average (EMA), suggesting strengthening short-term momentum. Additionally, the 14-day Relative Strength Index (RSI) stays above 50, reinforcing a bullish outlook.
On the upside, the first resistance appears at the psychological level of 0.6400, followed by the three-month high of 0.6408, recorded on February 21.
The immediate support for AUD/USD is at the nine-day EMA of 0.6301. A break below this key level could trigger further declines, potentially retesting the five-week low of 0.6187, recorded on March 5.
AUD/USD: Daily Chart
Australian Dollar PRICE Today
The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the strongest against the Canadian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.04% | 0.03% | -0.18% | -0.03% | -0.21% | -0.11% | -0.15% | |
| EUR | 0.04% | 0.03% | -0.16% | 0.02% | -0.08% | -0.09% | -0.23% | |
| GBP | -0.03% | -0.03% | -0.25% | -0.04% | -0.11% | -0.18% | -0.19% | |
| JPY | 0.18% | 0.16% | 0.25% | 0.14% | 0.02% | -0.02% | 0.09% | |
| CAD | 0.03% | -0.02% | 0.04% | -0.14% | -0.22% | -0.08% | -0.15% | |
| AUD | 0.21% | 0.08% | 0.11% | -0.02% | 0.22% | -0.01% | -0.09% | |
| NZD | 0.11% | 0.09% | 0.18% | 0.02% | 0.08% | 0.00% | 0.03% | |
| CHF | 0.15% | 0.23% | 0.19% | -0.09% | 0.15% | 0.09% | -0.03% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).
Australian Dollar FAQs
One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD.
The Reserve Bank of Australia (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 interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive.
China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs.
Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD.
The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.
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