Australian Dollar remains stronger following RBA Meeting Minutes
- The Australian Dollar strengthened after Trump exempted key technology products — including some from China — from his new “reciprocal” tariffs.
- RBA Meeting Minutes indicated uncertainty over the timing of the next interest rate move.
- The US Dollar is trying to steady as investors weigh rising stagflation concerns.
The Australian Dollar (AUD) strengthens for a fifth straight session against the US Dollar (USD) on Tuesday. The AUD/USD pair continued to gain momentum after US President Donald Trump exempted key technology products from his new “reciprocal” tariffs, lifting global risk sentiment.
The exemptions cover items largely produced in China—such as smartphones, computers, semiconductors, solar cells, and flat-panel displays—offering a boost to the AUD, as China remains Australia’s largest trading partner and a major consumer of its commodities.
Minutes from the Reserve Bank of Australia's (RBA) March 31–April 1 meeting suggested that the timing of the next interest rate move remains uncertain. While the Board noted that the May meeting would be an appropriate time to reassess policy, it emphasized that no decision had been predetermined.
Members acknowledged that global uncertainty, particularly surrounding US tariffs, could significantly affect the outlook. The Board also highlighted both upside and downside risks to the Australian economy and inflation.
Australia’s 10-year government bond yield slipped to approximately 4.33%. While the Reserve Bank of Australia (RBA) kept interest rates unchanged this month, it struck a more dovish tone on future cuts, pointing to easing core inflation. Markets are currently factoring in a 25-basis point cut in May and anticipate around 120 basis points of total easing over the course of the year.
Australian Dollar appreciates due to eroding investor confidence in US assets
- The US Dollar Index (DXY), which measures the USD against a basket of six major currencies, inched higher after hitting its lowest level since 2022. The DXY is trading around 99.90 and attempting to stabilize as investors respond to growing signs of stagflation risks.
- Atlanta Fed President Raphael Bostic remarked during early Tuesday’s market session that the US central bank still has a long road ahead to achieve its 2% inflation target, casting doubt on market expectations for additional interest rate cuts.
- The University of Michigan’s sentiment index dropped to 50.8 in April, while one-year inflation expectations surged to 6.7%. The US Producer Price Index (PPI) rose 2.7% year-over-year in March, down from 3.2% in February, with the core rate easing to 3.3%. Jobless claims ticked up to 223,000, although continuing claims declined to 1.85 million—pointing to a mixed picture in the labor market.
- On Sunday, Minneapolis Federal Reserve President Neel Kashkari said on CBS' Face the Nation that the economic fallout from Trump’s trade war would largely depend on how quickly trade uncertainties are resolved. “This is the biggest hit to confidence that I can recall in the 10 years I’ve been at the Fed—except for March 2020 when COVID first hit,” Kashkari remarked.
- Escalating trade tensions between the US and China have revived concerns about a potential global economic slowdown. On Friday, China’s Ministry of Finance announced a sharp increase in tariffs on US goods, raising them from 84% to 125%. This action came in response to President Trump’s earlier move to raise tariffs on Chinese imports to 145%.
- The US Consumer Price Index (CPI) inflation eased to 2.4% year-over-year in March, down from 2.8% in February and below the market forecast of 2.6%. Core CPI, which excludes food and energy prices, rose 2.8% annually, compared to 3.1% previously and missing the 3.0% estimate. On a monthly basis, headline CPI dipped by 0.1%, while core CPI edged up by 0.1%.
- Minutes from the latest Federal Open Market Committee (FOMC) Meeting suggested that policymakers are nearly unanimous in recognizing the dual challenge of rising inflation and slowing growth, cautioning that the Federal Reserve faces “difficult tradeoffs” in the months ahead.
- China’s Trade Balance for March, measured in Chinese Yuan (CNY), recorded a substantial increase to CNY 736.72 billion, up sharply from CNY 122 billion in the previous month. In US Dollar (USD) terms, the trade surplus also exceeded expectations, coming in at $102.6 billion—well above the forecast of $77 billion, though lower than the prior $170.51 billion.
- China’s Exports rose 13.5% year-over-year in March, accelerating from 3.4% in February, while imports declined 3.5% YoY, a smaller drop compared to the 7.3% contraction previously reported.
- The General Administration of Customs of China acknowledged the challenges facing the country’s exports, calling the current external environment “complex and severe.” Despite this, officials expressed confidence, stating that “the sky will not fall.” They reported a solid start to the year, with foreign trade showing growth in both volume and quality. The agency also emphasized China’s commitment to enforcing all measures necessary to counter US actions and to uphold its national sovereignty and security.
- The People's Bank of China (PBoC) is expected to implement further monetary easing in Q2 2025. This includes a potential 15 basis point cut to the loan prime rate (LPR) and a minimum 25 basis point reduction in the reserve requirement ratio (RRR). According to Citi analysts, cited in a Reuters report, there’s an increasing likelihood that domestic stimulus measures will be accelerated in response to mounting external pressures.
Australian Dollar rises to near 0.6350 due to persistent bullish bias
The AUD/USD pair is trading near the 0.6340 mark on Tuesday, with technical indicators on the daily chart pointing to a bullish bias. The pair remains above both the nine-day and 50-day Exponential Moving Averages (EMAs), while the 14-day Relative Strength Index (RSI) has moved above the neutral 50 level, reinforcing the positive momentum.
On the upside, the AUD/USD pair may aim for psychological resistance at 0.6400, followed by the four-month high of 0.6408.
Immediate support is seen at the 50-day EMA around 0.6270, with further support at the nine-day EMA near 0.6240. A decisive break below these levels could undermine the short-term bullish structure, opening the door to further downside toward the 0.5914 zone—its lowest since March 2020—and the key psychological level of 0.5900.
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 Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.14% | 0.04% | 0.13% | 0.08% | -0.26% | -0.39% | 0.28% | |
| EUR | -0.14% | -0.10% | 0.02% | -0.05% | -0.33% | -0.53% | 0.16% | |
| GBP | -0.04% | 0.10% | 0.11% | 0.04% | -0.22% | -0.43% | 0.26% | |
| JPY | -0.13% | -0.02% | -0.11% | -0.07% | -0.37% | -0.67% | 0.13% | |
| CAD | -0.08% | 0.05% | -0.04% | 0.07% | -0.30% | -0.47% | 0.21% | |
| AUD | 0.26% | 0.33% | 0.22% | 0.37% | 0.30% | -0.20% | 0.48% | |
| NZD | 0.39% | 0.53% | 0.43% | 0.67% | 0.47% | 0.20% | 0.69% | |
| CHF | -0.28% | -0.16% | -0.26% | -0.13% | -0.21% | -0.48% | -0.69% |
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.
Artigos Recomendados
