Quotes

CFD Trading Rate Australian Dollar vs US Dollar (AUDUSD)

Bid
Ask
Change (%)
Date/Time (GMT 0)
Over the past 10 days
Date Rate Change

Related news

  • 12.07.2024 11:01
    AUD/USD aims to recapture 0.6800 as cooling US inflation amplifies Fed rate-cut bets
    • AUD/USD remains firm as the US Dollar weakens due to easing price pressures.
    • Soft US inflation data for June boosts Fed rate-cut prospects.
    • The Australian Dollar will dance to the tunes of the outcome of China’s third plenum meeting.

    The AUD/USD pair rises after a mild correction to near 0.6755 in Friday’s European session. The Aussie asset aims to recapture the round-level resistance of 0.6800 as the US Dollar (USD) is under severe pressure due to growing speculation for the Federal Reserve (Fed) to start lowering interest rates from the September meeting.

    The expectations for Fed rate cuts swell after the United States (US) Consumer Price Index (CPI) report for June signalled that progress in disinflation has resumed after stalling in the first quarter of this year. Annually, the headline inflation decelerated at a faster pace to 3.0% and the core CPI, which excludes volatile food and energy items, unexpectedly declined to 3.3%.

    According to the CME FedWatch tool, a rate cut in September appears certain. Also, one more rate cut is expected in the November or December meeting.

    Rising prospects of early rate cuts have weighed heavily on the US Dollar. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, declines to near 104.35.

    Meanwhile, the markets sentiment remains favorable for risk-sensitive assets. S&P 500 futures have posted nominal gains in European trading hours. Going forward, investors will focus on the US Producer Price Index (PPI) data for June, which will be published at 12:30 GMT.

    On the Aussie front, investors await four-day China’s third plenum meeting, which is scheduled for next week. China’s Communist Party is expected to take measures to boost the real estate and manufacturing sectors. Being a proxy for China’s economic growth, strong fiscal spending announcements will strengthen the Australian Dollar (AUD). On the contrary, signs of lower fiscal spending than expected will do the opposite.

    Economic Indicator

    Consumer Price Index ex Food & Energy (YoY)

    Inflationary or deflationary tendencies are measured by periodically summing the prices of a basket of representative goods and services and presenting the data as the Consumer Price Index (CPI). CPI data is compiled on a monthly basis and released by the US Department of Labor Statistics. The YoY reading compares the prices of goods in the reference month to the same month a year earlier. The CPI Ex Food & Energy excludes the so-called more volatile food and energy components to give a more accurate measurement of price pressures. Generally speaking, a high reading is bullish for the US Dollar (USD), while a low reading is seen as bearish.

    Read more.

    Last release: Thu Jul 11, 2024 12:30

    Frequency: Monthly

    Actual: 3.3%

    Consensus: 3.4%

    Previous: 3.4%

    Source: US Bureau of Labor Statistics

    The US Federal Reserve has a dual mandate of maintaining price stability and maximum employment. According to such mandate, inflation should be at around 2% YoY and has become the weakest pillar of the central bank’s directive ever since the world suffered a pandemic, which extends to these days. Price pressures keep rising amid supply-chain issues and bottlenecks, with the Consumer Price Index (CPI) hanging at multi-decade highs. The Fed has already taken measures to tame inflation and is expected to maintain an aggressive stance in the foreseeable future.

     

  • 12.07.2024 08:29
    AUD/USD: Strong resistance exists at 0.6800 – UOB Group

    Instead of strengthening further, the Australian Dollar (AUD) is likely to trade in a 0.6740/0.6785 range instead. Room for AUD to continue to rise, but it has to surpass 0.6800 before further advance can be expected, UOB Group FX analysts Quek Ser Leang and Peter Chia note.

    AUD has to surpass 0.6800 to continue growing

    24-HOUR VIEW: “While we expected AUD to strengthen yesterday, we indicated that ‘any advance is unlikely to reach 0.6800.’ AUD subsequently rose, but it came close to reaching 0.6800 (high has been 0.6799). AUD pulled back from the high and closed slightly higher (0.6760, +0.19%). The pullback in overbought conditions suggest that instead of strengthening further today, AUD is likely to trade in 0.6740/0.6785 range instead.”

    1-3 WEEKS VIEW: “We turned positive in AUD early last week. In our most recent narrative from Monday (08 Jul, spot at 0.6745), we highlighted that ‘increasing upward momentum suggests AUD is likely to continue to rise to 0.6800.’ Yesterday, AUD rose to within one pip of 0.6800, reaching a high of 0.6799. While there is room for AUD to continue to rise, it has to surpass 0.6800 before further advance can be expected. Given the overbought conditions, it remains to be seen if AUD can break above 0.6800 in the next few days. Overall, only a breach of 0.6725 (‘strong support’ level was at 0.6700 yesterday) would indicate that the AUD strength has come to an end.”

  • 11.07.2024 14:04
    AUD/USD posts fresh six-month high near 0.6800 as US Inflation cools further
    • AUD/USD jumps to near 0.6800 as soft US inflation boosts Fed rate-cut bets.
    • US annual headline and core inflation decelerated sharply in June.
    • The RBA may cut interest rates next year.

    The AUD/USD pair jumps close to the crucial resistance of 0.6800 in Thursday’s American session. The Aussie asset strengthens as the US Dollar (USD) plunges after the United States (US) Consumer Price Index (CPI) report showed that inflationary pressures cool down again in June. This has prompted expectations for the Federal Reserve (Fed) to start reducing interest rates from the September meeting.

    The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, tumbles to near 104.00.

    US annual core inflation, which excludes volatile food and energy prices, came in lower at 3.3% than estimates and May’s reading of 3.4%. In the same period, the headline inflation decelerated at a faster pace to 3.0% from expectations of 3.1% and the former release of 3.3%.

    On month, headline inflation deflated by 0.1% and the core CPI grew at a slower pace of 0.2%. Soft inflation figures would deliver more confidence to Fed policymakers to discuss on an early return to the policy normalization process.

    According to the CME FedWatch tool, 30-day Federal Fund Futures price data indicates that a rate-cut in September is a done deal. The probability for Fed rate cuts has increased to 89% from 74.4% recorded a week ago.

    On the Asia-Pacific front, growing speculation that the Reserve Bank of Australia (RBA) will not cut interest rates this year has kept the near-term outlook of the Australian Dollar firm. The RBA would be one of the last to join the global rate-cut cycle as price pressures have revamped in Australia.

    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.

     

  • 11.07.2024 08:47
    AUD/USD: There’s a chance to reach 0.6800 – UOB Group

    Mild upward momentum is likely to lead to the Australian Dollar (AUD) edging higher. Any advance is unlikely to reach the major resistance at 0.6800, but nevertheless increasing upward momentum suggests AUD is likely to continue to rise to 0.6800, UOB Group FX analysts Quek Ser Leang and Peter Chia note.

    The next major resistance is at 0.6800

    24-HOUR VIEW: “Yesterday, we indicated that ‘further range trading seems likely, probably in a range of 0.6725/0.6755.’ AUD subsequently traded between 0.6733 and 0.6752, closing largely unchanged at 0.6747 (+0.09%). Upward momentum seems to be building, albeit tentatively. Today, AUD is likely to edge higher. Given the mild upward momentum, any advance is unlikely to reach 0.6800. There is another resistance level at 0.6775. Support is at 0.6735; a breach of 0.6725 would mean that the mild upward pressure has faded.”

    1-3 WEEKS VIEW: “We continue to hold the same as Monday (08 Jul, spot at 0.6745). As highlighted, increasing upward momentum suggests AUD is likely to continue to rise to 0.6800. Overall, only a breach of 0.6700 (‘strong support’ level previously at 0.6690) would indicate that the AUD strength that started early last week has come to an end.”

     

     

  • 11.07.2024 08:36
    AUD/USD Price Analysis: AUD/USD remains above 0.6750; next barrier at upper boundary
    • AUD/USD may test the upper boundary of the ascending channel around the level of 0.6785.
    • The 14-day RSI is positioned slightly below the 70 level, indicating potential overbought conditions and a forthcoming correction.
    • The key support appears at the lower boundary of the ascending channel around 0.6675 level.

    AUD/USD extends its losses for the third successive day, trading around 0.6760 during the European hours on Thursday. The analysis of the daily chart shows that the AUD/USD pair consolidates within an ascending channel, indicating a bullish bias in the pair's price action.

    Additionally, the 14-day Relative Strength Index (RSI) is positioned slightly below the 70 level, indicating confirmation of the bullish trend while also suggesting potential overbought conditions. A breach above this level could signal a need for caution, possibly indicating a forthcoming correction.

    Furthermore, the momentum indicator Moving Average Convergence Divergence (MACD) line is above the centerline, suggesting upward price movement. Divergence above the signal line further confirms this bullish trend, as it indicates increasing positive momentum.

    The AUD/USD pair may test the upper boundary of the ascending channel at approximately 0.6785. If it breaks through this level, the pair could target the psychological level of 0.6800.

    On the downside, the AUD/USD pair may find support around the lower boundary of the ascending channel at the 0.6675 level, with additional support near the 50-day Exponential Moving Average (EMA) at 0.6651. A break below this level could push the pair toward the throwback support around 0.6590.

    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   -0.08% -0.16% -0.06% 0.10% -0.13% -0.11% -0.10%
    EUR 0.08%   -0.07% 0.04% 0.21% -0.03% -0.02% -0.01%
    GBP 0.16% 0.07%   0.10% 0.28% 0.04% 0.04% 0.07%
    JPY 0.06% -0.04% -0.10%   0.15% -0.07% -0.09% -0.04%
    CAD -0.10% -0.21% -0.28% -0.15%   -0.25% -0.22% -0.21%
    AUD 0.13% 0.03% -0.04% 0.07% 0.25%   0.00% 0.04%
    NZD 0.11% 0.02% -0.04% 0.09% 0.22% -0.01%   0.03%
    CHF 0.10% 0.01% -0.07% 0.04% 0.21% -0.04% -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).

  • 10.07.2024 15:05
    AUD/USD: Rally can extend this summer – ING

    Higher chances of Trump winning in November means trouble for the China-sensitive Australian Dollar (AUD) in the longer run. The Reserve Bank of Australia (RBA) is perhaps facing the worst inflation issue in G10, ING’s FX strategist Francesco Pesole notes.

    AUD still has room to run this summer

    “Higher chances of Trump winning in November spell trouble for the China-sensitive AUD in the longer run. But the tactical picture hinges much more on US macro and domestic central banks.”

    “The RBA is perhaps facing the worst inflation issue in G10, with consistently hot monthly CPI prints taking it closer to another hike. 31 July will be the decisive day: 2Q CPI data are out, and if they surprise on the upside, we think the RBA will hike in August.”

    “Even if another hike can be averted, the prospect of cuts is increasingly remote. Given our view that markets will reward currencies with hawkish central banks, AUD still has room to run this summer, before the US election becomes too close to ignore.”

  • 10.07.2024 09:33
    AUD/USD consolidates near 0.6750 as investors await US Inflation
    • AUD/USD trades sideways with US Inflation in focus.
    • Fed Powell cited concerns over easing US labor market strength.
    • The RBA is expected to leave interest rates unchanged for the entire year.

    The AUD/USD pair stays in a tight range near 0.6750 in Wednesday’s European session. The Aussie asset turns sideways as investors have sidelined with focus on the United States (US) Consumer Price Index (CPI) data for June, which will be published on Thursday.

    The inflation data will provide cues about when the Federal Reserve (Fed) will start reducing interest rates. Meanwhile, market sentiment remains firm as investors see the Fed reducing interest rates in September meeting a done deal due to easing US labor market conditions. S&P 500 futures have posted some gains in European trading hours. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, hovers near 105.00.

    On Tuesday, Fed Chair Jerome Powell said in the semi-annual Congressional testimony on Tuesday that escalated inflation has not remained the only risk to Fed’s dual mandate. Powell cautioned about easing US labor market strength as the US is no longer an overheated economy.

    Latest US Nonfarm Payrolls data also showed a slowing trend in job demand, a rise in the Unemployment Rate to its highest in more than two years and expected slowdown in Average Hourly Earnings, a wage growth measure.

    On the Aussie front, growing speculation that the Reserve Bank of Australia (RBA) will be the last to join the global rate-cutting cycle has kept the Australian Dollar (AUD) on the front foot. The RBA is expected to keep its Official Cash Rate (OCR) at its current levels for the entire year due to reversed disinflation process, prompted by strong consumer spendings.

    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.

     

  • 10.07.2024 08:47
    AUD/USD: Likely to continue rising to 0.6800 – UOB Group

    Further range trading seems likely, probably in a range of 0.6725/0.6755. Increasing upward momentum suggests the Australian Dollar (AUD) is likely to continue to rise to 0.6800, UOB Group FX strategists Quek Ser Leang and Peter Chia note.

    All eyes on the 0.6800 mark

    24-HOUR VIEW: “AUD traded between 0.6724 and 0.6747 yesterday, narrower than our expected range of 0.6720/0.6755. AUD closed largely unchanged at 0.6741 (+0.06%). Further range trading seems likely, probably in a range of 0.6725/0.6755.”

    1-3 WEEKS VIEW: “We continue to hold the same as Monday (08 Jul, spot at 0.6745). As highlighted, increasing upward momentum suggests AUD is likely to continue to rise to 0.6800. Overall, only a breach of 0.6690 (no change in ‘strong support’ level from yesterday) would indicate that the AUD strength that started early last week has come to an end.”

  • 09.07.2024 11:29
    AUD/USD consolidates near 0.6750 ahead of Fed Powell’s testimony
    • AUD/USD turns sideways near 0.6750 as Fed Powell’s testimony comes under spotlight.
    • Increased market speculation for Fed rate cuts in September has improved market sentiment.
    • The RBA is expected to raise interest rates further.

    The AUD/USD pair turns sideways in Tuesday’s European session after printing a fresh six-month high at 0.6760 on Monday. The Aussie asset consolidates as investors shift to the sidelines ahead of the Federal Reserve (Fed) Chair Jerome Powell’s semi-annual Congressional testimony, which is scheduled at 14:00 GMT.

    Investors expect that Fed Powell will argue in favor of keeping interest rates at their current levels until policymakers get evidence that inflation will return to the desired rate of 2%. In his discussions at the European Central Bank (ECB) Forum on the Central Banking last week, Powell said that the central bank has made some progress in inflation and recent data suggests that disinflation has resumed.

    For more clarity on the inflation status, investors will focus on the United States (US) Consumer Price Index (CPI) data for June, which will be published on Thursday. Economists have forecasted that the core inflation, which takes out volatile food and energy items, grew steadily by 0.2% and 3.4% on monthly and annual basis, respectively.

    Meanwhile, the market sentiment remains upbeat amid firm speculation that the Fed will start reducing interest rates from the September meeting. S&P 500 futures have posted decent gains in European trading hours. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, gains ground near 105.00.

    On the Aussie front, investors expect that the Reserve Bank of Australia (RBA) could tighten its policy further as the disinflation process appears to have reversed. Australia’s monthly CPI rose strongly by 4% in May, which pushed back expectations of rate cuts this year.

    Going forward, investors will focus on the China’s CPI data for June, which will be published on Wednesday. It is worth noting that Australia is the leading trading partner of China and a significant change in inflationary pressures in the Chinese economy could influence the Australian Dollar’s (AUD) outlook.

    Economic Indicator

    Fed's Chair Powell testifies

    Federal Reserve Chair Jerome Powell testifies before Congress, providing a broad overview of the economy and monetary policy. Powell's prepared remarks are published ahead of the appearance on Capitol Hill.

    Read more.

    Next release: Tue Jul 09, 2024 14:00

    Frequency: Irregular

    Consensus: -

    Previous: -

    Source: Federal Reserve

     

  • 09.07.2024 08:30
    AUD/USD: Likely to rise to 0.6800 – UOB Group

    The Australian Dollar (AUD) is expected to trade in a range between 0.6720 and 0.6755. Increasing upward momentum suggests AUD is likely to continue to rise to 0.6800, UOB Group analysts Quek Ser Leang and Lee Sue Ann note.

    AUD is likely to continue to rise to 0.6800

    24-HOUR VIEW: “Yesterday, we indicated that ‘while there is room for AUD to rise above 0.6755 today, overbought conditions suggest it might not be able to maintain a foothold above this level.’ We added, ‘the resistance level at 0.6770 is also unlikely to come under threat.’ Our view turned out to be correct, as AUD rose to 0.6762 and then pulled back to close at 0.6737 (-0.16%). AUD appears to have entered a range trading phase. We expect AUD to trade between 0.6720 and 0.6755 today.”

    1-3 WEEKS VIEW: “We continue to hold the same as yesterday (08 Jul, spot at 0.6745). As highlighted, increasing upward momentum suggests AUD is likely to continue to rise to 0.6800. Overall, only a breach of 0.6690 (no change in ‘strong support’ level from yesterday) would indicate that the AUD strength that started early last week has come to an end.”

  • 08.07.2024 12:25
    AUD/USD hovers near six-month high near 0.6750 on firm Fed rate-cut prospects
    • AUD/USD holds gains near a six-month high around 0.6750 as traders raise Fed rate-cut bets.
    • The US labor market strength appears to have lost momentum.
    • The RBA could tighten its monetary policy further.

    The AUD/USD pair trades close to a six-month high at 0.6760 in Monday’s New York session. The Aussie asset holds gains as the US Dollar (USD) is on the backfoot due to growing speculation that the Federal Reserve (Fed) will begin reducing interest rates from the September meeting.

    Traders raise bets for Fed rate cuts in September as the US labor market strength appears to be moderating. June’s Nonfarm Payrolls (NFP) report showed that the Unemployment Rate rose to 4.15 in more than two years. Also, Average Hourly Earnings, a measure of wage growth, has declined expectedly, which has trimmed the risks of inflation remaining persistent.

    Higher expectations for early Fed rate cuts have improved the market sentiment. S&P 500 futures have recovered losses delivered in early Europe and have turned positive. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, has fallen to a near a three-week low of around 104.85.

    Contrary to market expectations, Fed officials signalled in their latest dot plot that there will be only once rate cut this year. Going forward, US Consumer Price Index (CPI) report for June will be the major trigger, which will be published on Thursday. The US inflation will influence market expectations for Fed rate cuts in September.

    On the Aussie front, surged expectations that the Reserve Bank of Australia (RBA) could tighten its policy further have kept the Australian Dollar (AUD) strong. Upside risks to price pressures have boosted bets for more rate hikes by the RBA.

    Being a proxy player to world’s second-largest economy, the Australian Dollar will be impacted by China’s CPI report for June, which will be published on Wednesday. The report is expected to show that price pressures grew at a higher pace of 0.4% from the prior release of 0.3% on year.

    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.

     

  • 08.07.2024 08:50
    AUD/USD: Likely to continue to rise to 0.6800 – UOB Group

    Room for Australian Dollar (AUD) to rise above 0.6755. Overbought conditions suggest it might not be able to maintain a foothold above this level, but increasing upward momentum suggests AUD is likely to continue to rise to 0.6800, UOB Group analysts note.

    AUD is likely to trade towards 0.6800

    24-HOUR VIEW: “Last Friday, we noted that ‘upward momentum has increased, albeit not much.’ We highlighted that AUD ‘is likely to edge higher, but the 0.6755 level is expected to offer solid resistance.’ AUD rose as expected, reaching a high of 0.6753. While there is room for AUD to rise above 0.6755 today, overbought conditions suggest it might not be able to maintain a foothold above this level. The resistance level at 0.6770 is also unlikely to come under threat. Support levels are at 0.6730 and 0.6715.”

    1-3 WEEKS VIEW: “In our update from last Thursday (04 Jul, spot at 0.6710), we indicated that ‘if AUD can surpass 0.6755, it could continue to rise to 0.6800.’ Last Friday, AUD rose to a high of 0.6753. While 0.6755 has not been clearly breached yet, increasing upward momentum suggests it is likely to continue to rise to 0.6800. Overall, only a breach of 0.6690 (‘strong support’ level previously at 0.6665) would indicate that the AUD strength that started early last week has come to an end.”

  • 07.07.2024 23:29
    AUD/USD holds below 0.6750 on US Dollar recovery
    • AUD/USD trades on a weaker note around 0.6745 in Monday’s early Asian session. 
    • US NFP rose 206K in June versus 218,000 prior, better than the estimated. 
    • The AUD strength holds amid stronger Australian economic data. 

    The AUD/USD pair edges lower to 0.6745, snapping the four-day winning streak during the early Asian session on Monday. The renewed US Dollar (USD) demand amid the cautious mood weighs on the pair. In the absence of any top-tier data releases from Australia and the US on Monday, the USD price dynamic will be the main driver for the AUD/USD pair.

    US employment growth slowed in May, according to the US Bureau of Labour Statistics (BLS) on Friday. Nonfarm Payrolls (NFP) in the US increased 206K in June, followed by the 218,000 rise (revised from 272,000) recorded in May. This figure came in above the market expectation of 190,000.

    Meanwhile, the Unemployment Rate ticked higher to 4.1% in June from 4% in May. The wage inflation, as measured by the change in the Average Hourly Earnings, dropped to 3.9% YoY in June from 4.1% in the previous reading, in line with market expectations.

    The recent employment data have raised the chance of rate cuts from the US Federal Reserve (Fed) in September, with the markets pricing 77% odds, up from 70% before the report. The expectation of a Fed rate cut is likely to exert some selling pressure on the Greenback in the near term and might cap the downside for the pair. 

    On the Aussie front, the elevated inflation in Australia, along with a stronger Retail Sales and Services PMI, prompted the Reserve Bank of Australia (RBA) to remain hawkish. This, in turn, might continue to underpin the Australian Dollar (AUD) against the USD. 

    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.

     

  • 05.07.2024 11:17
    AUD/USD: The pair appreciates by almost 5% since April – DBS

    AUD/USD bottomed below 0.64 on April 19 and rose above 0.67 on Thursday. Australian Dollar (AUD) bucked the depreciation in the Japanese Yen (JPY) and the Chinese Yuan (CNY), DBS Senior FX Strategist Philip Wee notes.

    AUD trades above 0.67 on Friday

    “AUD/USD bottomed below 0.64 on April 19 and rose above 0.67 on Thursday. The rally was impressive, considering how AUD bucked the depreciation in JPY and CNY, the currencies of its two largest trading partners. Since April 19, the currency pair has appreciated by 4.8% to 0.6726.” 

    “Between April and May, Australia’s CPI inflation hit a six-month high of 4% YoY, while the US’s PCE inflation fell to a three-month low of 2.6% YoY. The unemployment rate declined to 4% from 4.1% in Australia but increased to 4% from 3.9% in the US. Australia’s retail sales growth accelerated to 0.6% MoM from 0.1%, but US retail sales ex-autos contracted by the same 0.1% MoM pace for a second month.”

    “Interest rate futures are not ruling out another hike by the Reserve Bank of Australia this year. Although the RBA kept the cash rate target unchanged at 4.35% at its meeting on June 18, the RBA minutes showed the committee considering a hike on upside inflation risks. Conversely, the futures market has increased the odds of a Fed cut in September to 70% from 50% last Friday.”

  • 05.07.2024 08:50
    AUD/USD: The pair may surpass 0.6755 – UOB Group

    The Australian Dollar (AUD) is likely to edge higher, and the 0.6755 level is expected to offer solid resistance. If AUD can surpass 0.6755, it could continue to rise to 0.6800, UOB Group analysts Quek Ser Leang and Lee Sue Ann note.

    Above 0.6755 AUD can continue to rise to 0.6800

    24-HOUR VIEW: “After AUD surged to a high of 0.6734 two days ago, we indicated yesterday that ‘the sharp rally appears to be overdone, and instead of continuing to rise, AUD is likely to trade in a sideways range of 0.6685/0.6735.’ AUD then traded between 0.6704 and 0.6732. Upward momentum has increased, albeit not much. Today, provided that AUD does not break below 0.6690, it is likely to edge higher. However, the 0.6755 level is expected to offer solid resistance.”

    1-3 WEEKS VIEW: “We continue to hold the same view as yesterday (04 Jul, spot at 0.6710). As highlighted, after rising strongly two days ago, upward momentum has increased. We pointed out that there is a significant resistance at 0.6755. If AUD can surpass this level, it could continue to rise to 0.6800. We will continue to expect a higher AUD, provided that it remains above 0.6665 (no change in ‘strong support’ from yesterday).”

  • 04.07.2024 13:20
    AUD/USD strengthens on hopes of narrowing Fed-RBA policy divergence
    • AUD/USD holds gains near a five-month high of around 0.6730 on firm hopes that the Fed-RBA policy divergence will be narrowed soon.
    • Weak US labor demand in the private sector and contraction in Services PMI have strengthened early Fed rate-cut hopes.
    • Reserved disinflation and robust Retail Sales growth have prompted RBA rate hike bets.

    The AUD/USD pair trades close to a five-month high near 0.6730 in Thursday’s American session. The Aussie asset strengthens amid firm speculation that the policy divergence between the Federal Reserve (Fed) and the Reserve Bank of Australia (RBA) would narrow.

    Investors expect the Fed to start reducing interest rates from the September meeting. According to the CME FedWatch tool, 30-day Federal Funds Futures pricing data shows that the probability of rate cuts in September has improved to 72.6% from 66% recorded a week ago. The data also shows that the Fed will cut interest rates twice this year, which has improved investors' risk appetite. S&P 500 futures have posted nominal gains in European trading hours.

    Early Fed rate cut expectations have been prompted by deepening concerns over the United States' (US) economic strength. The economy appears to have lost momentum in the second quarter, as the ISM Services PMI contracted in June. The Services PMI, a measure of activities in the service sector, which accounts for two-thirds of the economy, declined below the 50.0 threshold to 48.8 from expectations of 52.5 and the prior release of 53.8.

    Also, labor demand in the private sector unexpectedly declined in June, which raised concerns over US labor market strength. Weak US data has weighed heavily on the US Dollar (USD). The US Dollar Index (DXY) has declined to near 105.20.

    On the contrary, financial markets expect that the Reserve Bank of Australia (RBA) could tighten its policy further. Reversed disinflation and stronger-than-expected monthly Retail Sales have boosted the possibility of more rate hikes by the RBA. This has also strengthened the Australian Dollar (AUD).

    On Wednesday, the Australian Bureau of Statistics reported that Retail Sales grew at a robust pace of 0.6% from the estimates of 0.2% and the prior release of 0.1%.

    Economic Indicator

    Retail Sales s.a. (MoM)

    The Retail Sales data, released by the Australian Bureau of Statistics on a monthly basis, measures the value of goods sold by retailers in Australia. Changes in Retail Sales are widely followed as an indicator of consumer spending. Percent changes reflect the rate of changes in such sales, with the MoM reading comparing sales values in the reference month with the previous month. Generally, a high reading is seen as bullish for the Australian Dollar (AUD), while a low reading is seen as bearish.

    Read more.

    Last release: Wed Jul 03, 2024 01:30

    Frequency: Monthly

    Actual: 0.6%

    Consensus: 0.2%

    Previous: 0.1%

    Source: Australian Bureau of Statistics

    The primary gauge of Australia’s consumer spending, the Retail Sales, is released by the Australian Bureau of Statistics (ABS) about 35 days after the month ends. It accounts for approximately 80% of total retail turnover in the country and, therefore, has a significant bearing on inflation and GDP. This leading indicator has a direct correlation with inflation and the growth prospects, impacting the Reserve Bank of Australia’s (RBA) interest rates decision and AUD valuation. The stats bureau uses the forward factor method, ensuring that the seasonal factors are not distorted by COVID-19 impacts.

     

  • 04.07.2024 08:37
    AUD/USD: A breach above 0.6755 to lead AUD to 0.6800 – UOB Group

    The Australian Dollar (AUD) is likely to trade in a sideways range of 0.6685/0.6735. If AUD can surpass 0.6755, it could continue to rise to 0.6800, UOB Group analysts Quek Ser Leang and Peter Chia note.

    AUD is set to rise to 0.6800

    24-HOUR VIEW: “We noted yesterday that ‘the underlying tone seems to be firming.’ We also indicated that while AUD ‘could edge above 0.6685, the major resistance at 0.6705 is unlikely to come under threat.’ The sudden surge in momentum that sent AUD surging to a high of 0.6734 came was surprising. The sharp rally appears to be overdone, and instead of continuing to rise, AUD is likely to trade sideways at these higher levels. Expected range for today: 0.6685/0.6735.”

    1-3 WEEKS VIEW: “On Monday (01 Jul, spot at 0.6670), we noted ‘a slight increase in upward momentum.’ We indicated that ‘as long as AUD remains above 0.6610, it is likely to edge higher, but the likelihood of it breaking clearly above the major resistance zone of 0.6705/0.6715 is low for now.’ After trading sideways for a couple of days, AUD lifted off and broke above the major resistance zone, reaching a high of 0.6734. Not surprisingly, there has been a sharp increase in upward momentum. That said, there is another significant resistance level at 0.6755. If AUD can surpass this level, it could continue to rise to 0.6800. Overall, we continue to expect a higher AUD, provided that it remains above 0.6665 (‘strong support’ level was at 0.6625 yesterday).”

  • 04.07.2024 06:54
    AUD/USD jumps above 0.6700 as weaker US data drags US Dollar lower
    • AUD/USD trades in positive territory for three straight days near 0.6715 in Thursday’s early European session. 
    • The upbeat Australian economic data fueled arguments that the RBA could raise interest rates again. 
    • The cautious stance from the Fed officials might help limit the USD’s downside.

    The AUD/USD pair gathers strength around 0.6715 during the early European session on Thursday. The uptick of the Australian Dollar (AUD) is bolstered by the encouraging Retail Sales data for May, which spurred the case for a rate hike by the Reserve Bank of Australia (RBA).

    Australia’s Retail Sales growth was stronger than expected in May, fueling to arguments that the Australian central bank could raise interest rates as early as August. The nation’s Retail Sales rose 0.6% MoM in May from the previous reading of a 0.1% increase, according to the Australian Bureau of Statistics (ABS) on Wednesday. Additionally, the rise of Aussie is attributed to the Judo Bank's Australia Purchasing Managers Index (PMI) reports, which improved slightly in June.

    On the other hand, the weaker-than-expected US economist dada continues to drag the Greenback lower. The US Services PMI declined to 48.8 in June from 53.8 in the previous reading, below the market consensus of 52.5, the Institute for Supply Management (ISM) showed on Wednesday. 

    However, the cautious stance from the Federal Reserve (Fed) officials might lift the USD and cap the pair’s upside. Chicago Fed President Austan Goolsbee said early Thursday that getting inflation back to 2% will take time and there is still much data to be had on the economy. 

    Meanwhile, the minutes of the FOMC June monetary policy meeting showed that the Fed officials lacked the confidence they needed to cut the interest rate. “Some participants emphasized the Committee’s data-dependent approach, with monetary policy decisions being conditional on the evolution of the economy rather than being on a preset path,” the minutes showed. Financial markets are now pricing in a nearly 66% chance for a 25 basis points (bps) Fed rate cut in September, up from 63% on Tuesday, according to the CME FedWatch tool. 

    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.

     

  • 04.07.2024 02:59
    AUD/USD sticks to gains above 0.6700, remains close to multi-month top set on Wednesday
    • AUD/USD attracts some buyers for the third straight day despite weaker Aussie trade balance data.
    • September Fed rate cut bets keep the USD bulls on the defensive and lend some support to the pair.
    • Holiday-thinned liquidity warrants some caution for bullish traders ahead of the US NFP on Friday. 

    The AUD/USD pair trades with a positive bias for the third straight day on Thursday and is currently placed comfortably above the 0.6700 round-figure mark. Spot prices remain well within the striking distance of a nearly seven-month peak touched on Wednesday and seem poised to build on the overnight breakout through a multi-week-old range. 

    The Australian Dollar (AUD) continues to draw support from the upbeat domestic Retail Sales data released on Wednesday, which strengthened the case for a rate hike by the Reserve Bank of Australia (RBA). This, along with the recent US Dollar (USD) slump, overshadows data showing that Australia’s trade surplus narrowed to A$5.77 billion in May from A$6.54 billion in the previous month and acts as a tailwind for the AUD/USD pair. 

    The incoming softer US macro data pointed to signs of weakness in the labor market and a softening economy. Moreover, the minutes of the last FOMC meeting revealed that the majority of policymakers said the US economic growth is gradually cooling. This reinforces bets that the Federal Reserve (Fed) will cut rates in September, which triggered a steep fall in the US Treasury bond yields and dragged the USD to a three-week low on Wednesday. 

    Apart from this, the underlying strong bullish sentiment across the global equity markets is seen undermining the safe-haven buck and lending support to the risk-sensitive Aussie. That said, persistent geopolitical tensions, along with political uncertainty in the US and Europe, might hold back bulls from placing aggressive bets around the AUD/USD pair amid relatively lighter trading volumes on the back of the Independence Day holiday in the US. 

    Investors might also prefer to wait on the sidelines ahead of the closely-watched US monthly employment details on Friday. The popularly known as the Nonfarm Payrolls (NFP) report might influence expectations about the Fed's future policy decisions, which, in turn, will drive the USD and provide a fresh impetus to the AUD/USD pair. Nevertheless, the fundamental backdrop suggests that the path of least resistance for spot prices is to the upside.

    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.

     

  • 03.07.2024 10:39
    AUD/USD exhibits sideways trend below 0.6700 with US labor market data in focus
    • AUD/USD trades sideways below 0.6700 for more than two weeks.
    • The RBA could tighten its monetary policy further as disinflation appears to have reversed.
    • Investors await the US ADP Employment Change and the ISM Services PMI for June.

    The AUD/USD pair stays in a tight range below the immediate resistance of 0.6700 from almost three weeks. The upside in the Aussie asset appears to be restricted as the Reserve Bank of Australia (RBA) has not leaned strongly towards raising interest rates further despite price pressures appear to have revamped again.

    Australia’s Monthly Consumer Price Index (CPI) has been accelerating for the last three months after progress in the disinflation process stalled in the December-February period. In May, the inflation measure grew strongly by 4.0% from expectations of 3.8% and the prior release of 3.6%.

    Meanwhile, the US Dollar (USD) remains on the backfoot as financial markets expect the Federal Reserve (Fed) to start reducing interest rates after the September meeting. According to 30-day Federal Funds pricing data from the CME FedWatch tool, the Fed is also expected to deliver two rate cuts this year.

    On Tuesday, Fed Chair Jerome Powell said at the European Central Bank (ECB) Forum of the Central Banking in Sintra, Portugal that the central bank has made quiet a bit progress on inflation and recent data shows that disinflation has resumed. In spite of that policymakers want to see inflation declining for months before cutting interest rates.

    In today’s session, investors will focus on the ADP Employment Change and the ISM Services PMI reports for June. The ADP is expected to show that 160K job-seekers were hired by private employers, slightly higher than May’s reading of 152K. The ISM Services PMI is estimated to have expanded at a slower pace of 52.5 from the former release of 53.8.  

    This week, the major trigger for the US Dollar will be the Nonfarm Payrolls (NFP) data for June, which will be published on Friday.

    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.

     

1 / 7

© 2000-2024. All rights reserved.

This site is managed by Teletrade D.J. LLC 2351 LLC 2022 (Euro House, Richmond Hill Road, Kingstown, VC0100, St. Vincent and the Grenadines).

The information on this website is for informational purposes only and does not constitute any investment advice.

The company does not serve or provide services to customers who are residents of the US, Canada, Iran, The Democratic People's Republic of Korea, Yemen and FATF blacklisted countries.

AML Website Summary

Risk Disclosure

Making transactions on financial markets with marginal financial instruments opens up wide possibilities and allows investors who are willing to take risks to earn high profits, carrying a potentially high risk of losses at the same time. Therefore you should responsibly approach the issue of choosing the appropriate investment strategy, taking the available resources into account, before starting trading.

Privacy Policy

Use of the information: full or partial use of materials from this website must always be referenced to TeleTrade as the source of information. Use of the materials on the Internet must be accompanied by a hyperlink to teletrade.org. Automatic import of materials and information from this website is prohibited.

Please contact our PR department if you have any questions or need assistance at pr@teletrade.global.

Bank
transfers
Feedback
Live Chat E-mail
Up
Choose your language / location