The Australian dollar loses the land due to the high rates of reducing the RBA rate in May
- The Australian dollar remains under pressure as the US dollar is strengthened, with the support of reducing tensions between the United States of China.
- China’s step to exempt some American imports from its tariffs by 125 % of optimism to improve trade relations.
- Federal Reserve during the period of blackout before the Federal Open Market Committee meeting on May 7.
The Australian dollar (AUD) extends in the second consecutive session on Monday. The AUD/USD pair is under pressure as it strengthens the US dollar (USD) amid signs of reducing tensions between the United States and China.
China has exempted some American imports from a 125 % tariff on Friday, according to business sources. This step has sparked hopes that the long trade war between the two largest economies in the world has been close to its end.
However, Reuters cited a spokesman for the Chinese embassy on Friday, which he strongly denied any current negotiations with the United States, saying: “China and the United States have no advice or negotiations on definitions.” Washington spokesman urged “to stop creating confusion.”
AUD also faces the opposite winds because expectations are rising that the Australian Reserve Bank (RBA) will provide a rate of 25 Basis in May, with deepening economic uncertainty and intensification of concerns about the World Trade Environment.
The Australian dollar is declining, as the US dollar earns a ground amid the fears of the United States of China
- The US dollar index (DXY), which measures the dollar for six main currencies, is gaining ground for the second day in a row, and trading near 99.60 at the time of writing this report. The Federal Reserve (Fed) is in a blackout position before the Federal Open Market Committee meeting on May 7 (FOMC).
- US Minister of Agriculture Brock Rollins said on Sunday, Reuters said, the Trump administration is in daily discussions with China regarding definitions. Rollins stressed that the talks were continuing and that commercial agreements with other countries were “very close”.
- Michael Hart, President of the American Chamber of Commerce in China, indicated that it is encouraging to see the United States and China are reviewing the definitions. Hart pointed out that although exclusion lists for specific categories of business, no official ads or policies have been issued yet. Both the Chinese Ministry of Commerce and the US Department of Commerce are currently gathering inputs in this regard.
- The US Department of Labor (DOL) said on Thursday that the initial requests for unemployment benefits rose to the week ending April 19. The first unemployed claims rose to 222,000, a little higher than the expectations and an increase of the revised number of the previous week of 216,000. Meanwhile, the unemployed demands decreased by 37,000, and decreased to 1.841 million for the week ending April 12.
- US Treasury Secretary Scott Beesen acknowledged on Wednesday that the current definitions – 145 % on Chinese goods and 125 % on American goods – are not sustainable and must be reduced to start a meaningful dialogue.
- The National Director of the Economic Council, Kevin Haysit, the chief economist of President Trump, stated that the US Trading Representative (USTR) has 14 stated meetings with foreign trade ministers. Hasit also indicated that 18 written proposals were received from these ministers. According to Hasat, China is still open to negotiations.
- Westpac expected on Thursday that the Australian Reserve Bank (RBA) would reduce interest rates by 25 basis points at its next meeting on May 20. RBA adopted an approach based on data in the last quarters, making it difficult to predict its actions beyond the next meeting with confidence.
- On Thursday, a Beijing official reiterated that there was no “economic and commercial negotiations” with us, and stressed that the United States should “cancel all unilateral tariff measures” to pave the way for talks.
- The Chinese Ministry of Finance stated on Friday that global economic growth is still slow, with the continued definitions and commercial wars in undermining economic and financial stability. The Ministry urged all parties to strengthen the international economic and financial system through stronger multilateral cooperation, for all Reuters.
The Australian dollar remains less than 0.6400; Resistance appears near EMA for nine days
AUD/USD pair is traded around 0.6390 on Monday, with the daily chart showing a budget. The pair continues to withstand the Si -moving average for nine days (EMA), while the 24 -day relative indicator (RSI) is still higher than the level of 50, indicating a continuous escalating momentum.
In the upscale direction, the immediate resistance is seen at an altitude of the last four months at 0.6439, which was published on April 22. It can pave a decisive break above this level of the height for a period of five months at 0.6515.
The initial support is aligned in EMA for nine days from 0.6367, followed by stronger support near EMA for 50 days at 0.6305. The continuous decrease without these levels would weaken the upward preparation and can lead to deeper losses, with a decrease in the number of March 2020 near 0.5914.
Aud/USD: Daily Chart
Australian dollar price today
The table below shows the percentage of change in the Australian dollar (AUD) against the main currencies listed today. The Australian dollar was the weakest against the Swiss franc.
| US dollar | euro | GBP | JPY | CAD | Aud | Nzd | Chf | |
|---|---|---|---|---|---|---|---|---|
| US dollar | 0.08 % | 0.18 % | 0.01 % | 0.09 % | 0.24 % | 0.12 % | -16 % | |
| euro | -08 % | 0.04 % | -08 % | -02 % | 0.06 % | 0.03 % | -26 % | |
| GBP | -18 % | -04 % | -0.13 % | -04 % | 0.00 % | -02 % | -0.29 % | |
| JPY | -01 % | 0.08 % | 0.13 % | 0.09 % | 0.27 % | -1.30 % | 0.09 % | |
| CAD | -0.09 % | 0.02 % | 0.04 % | -0.09 % | 0.04 % | 0.04 % | -0.23 % | |
| Aud | -0.24 % | -06 % | -01 % | -0.27 % | -04 % | -0.03 % | -0.32 % | |
| Nzd | -0.12 % | -0.03 % | 0.02 % | 1.30 % | -04 % | 0.03 % | -0.28 % | |
| Chf | 0.16 % | 0.26 % | 0.29 % | -0.09 % | 0.23 % | 0.32 % | 0.28 % |
The heat map shows the percentage changes in the main currencies against each other. The basic currency is chosen from the left column, while the quotation currency is chosen from the top row. For example, if you choose the Australian dollar from the left column and move along the horizontal line to the US dollar, the percentage offered in the box will represent AUD (Base)/USD (Quote).
Questions and answers in Australian dollars
One of the most important factors for the Australian dollar (AUD) is the level of interest rates set by the Australian Reserve Bank (RBA). Since Australia is a resource -rich country, the other main engine is the largest export price, iron ore. The health of the Chinese economy, the largest commercial partner, is a factor, as well as inflation in Australia, the rate of growth and commercial balance. Market morale-whether investors are eating more risky assets (risk) or searching for safe materials (risk)-is also a worker, with positive risks for AUD.
The Australian Reserve Bank (RBA) affects the Australian dollar (AUD) by determining the level of interest rates that Australian banks can persuade each other. This affects the level of interest rates in the economy as a whole. The main goal of RBA is to maintain a stable inflation rate of 2-3 % by setting interest rates up or down. Relatively high interest rates are supported compared to other main central banks, and relatively low vice versa. RBA can also use and tighten quantitative dilution to influence credit conditions, with previous AUD negative and positive to AUD.
China is the largest commercial partner in Australia, so the health of the Chinese economy is a major impact on the value of the Australian dollar (AUD). When the Chinese economy does a good job, it buys more raw materials, commodities and services from Australia, raising the demand for AUD, and raising its value. The opposite is the case when the Chinese economy does not grow at the speed available. Positive or negative surprises in Chinese growth data, therefore, they often have a direct impact on the Australian dollar and its wives.
Iron Ore is the largest export in Australia, as it represents 118 billion dollars annually according to data from 2021, with China as its main destination. Therefore, the price of iron ore can be an engine for the Australian dollar. In general, if the price of iron ore rises, the AUD also rises, as the total demand for the currency increases. The opposite is the case if the price of iron ore decreases. Iron ore prices also tend to increase the possibility of a positive commercial balance for Australia, which is also positive for AUD.
The commercial balance, which is the difference between what a country earns from its exports in exchange for what it pays for its imports is another factor that can affect the value of the Australian dollar. If Australia produces very required after exports, its currency will obtain a value of the excess demand created from foreign buyers who seek to buy its exports in exchange for what it spends on buying imports. Therefore, the positive net trade balance enhances AUD, with the opposite effect if the trade balance is negative.
