Australian Dollar holds gains as US Dollar struggles ahead of Q4 GDP Annualized data – FXStreet

• The Australian dollar rises despite increased risk-off sentiment amid concerns about deducting US auto rates.
• OUD was able to find support as investors expect the Reserve Bank of Australia to maintain interest rates next week.
• President Donald Trump's decision to impose a 25% tariff on automobile imports further heightened global trade tensions.

The Australian Dollar (AUD) is grateful for the US Dollar (USD) on Thursday despite increased risk aversion amid pressing concerns about U.S. auto rates. The AUD/USD pair weakened global trade tensions later Wednesday following President Donald Trump's decision to impose a 25% tariff on automobile imports late Wednesday. The duties are set to take effect on April 2nd, and collections will begin the following day.

President Trump proposed a plan to impose tariffs on copper imports within weeks on Wednesday, but initially the Commerce Department had to decide the issue until November 2025. However, Australia is a key copper exporter and the development provided some support to AUD as potential tariff movements increased commodity prices.

Investors were able to find more support as they hope that the Reserve Bank of Australia (RBA) will remain stable next week. In the past February, the RBA reduced its first 25 base point rate in four years.

RBA Assistant Governor (Economy) Sarahhunter reiterated the central bank's careful approach to further rate cuts, especially in response to US policy changes and the impact on Australia's inflation outlook, as the February policy statement shows a more conservative attitude than market expectations.

Australian dollars advance as the US dollar fights amid lower yields

• The US Dollar Index (DXY), which measures USD against six major currencies, has withdrawn from recent profits and is trading around 104.50 copies. As the US Treasury yields drop, greenback is under pressure, with two and ten years yields of 4.0% and 4.34% respectively.
• Traders closely monitor US economic data, including their weekly first unemployment claims and their final fourth quarter Gross Domestic Product (GDP) annual report.
• According to Reuters, Trump will give him a month's reprieve for importing auto parts from the proposed 25% auto tariff. The declaration will be subject to a 25% tariff from 04:01 GMT on April 3, but auto parts will be designated in the Federal Registration Notice, but auto parts will face tariffs at a later date, as specified by May 3, 2025.
• St. Louis Federal President Albert Musalem made a strong statement on Wednesday, joining in the rise in Fed policymakers warning about the Trump administration's tariff policy. Musalem warned that these measures would disrupt a stable US economy, increase uncertainty and increase inflation.
• Minneapolis Federal President Neil Kashkari said, “The job market remains strong, but the biggest challenge is getting the job done,” stressing that there is still work to tackle inflation. Kashkari also said policy uncertainty makes the Fed more complicated.
• China's expectations for stimulation could boost Australia's economy given strong trade relations between the two countries. China's Communist Party and the State Council have proposed measures to “sharply increase consumption” by increasing wages and easing financial burdens. This is an effort to restore consumer trust and stimulate a struggling economy.
• President Trump announced plans on Wednesday to reduce Chinese tariffs to promote the sale of Bitedan, Tiktok's US business. He emphasized that tariffs retain greater value than Tiktok itself, but he suggested that mild tariff cuts would help finalize the transaction. Trump also suggested that Tiktok sales deadlines could be extended again.
• Australia's monthly consumer price index (CPI) rose 2.4% year-on-year in February, slightly below the January 2.5% increase and market expectations of 2.5%.
• Australian treasurer Jim Chalmers presented his 2025/26 budget on Tuesday, outlining key economic forecasts and tax cuts totaling around $17.1 billion in two rounds. The fiscal deficit is projected to be $27.6 billion in 2024-25 and $42.1 billion in 2025-26. GDP growth is expected to reach 2.25% in fiscal year 2026 and 2.5% in 2027. The tax cut appears to be aimed at strengthening political support.

Technical Analysis: Australian Dollar Covers EMA for approximately 0.6300, 9 Days

The AUD/USD traded nearly 0.6290 on Thursday, with technical indicators suggesting a potential bullish shift as the pair attempts to surpass the downward channel pattern. However, the 14-day relative strength index (RSI) still remains below 50, indicating that bear pressure is still present.

The nine-day exponential moving average (EMA) at 0.6305 serves as an immediate resistance level. A breakout that surpasses this point could bolster short-term price momentum, paving the way for the last monthly high test seen on March 18th.

Conversely, if you fail to maintain profits, the AUD/USD pair can re-enter the downward channel, enhancing your bearish outlook. This scenario could drive towards a seven-week minimum of 0.6187 recorded on March 5th, matching the lower limit of the channel.

AUD/USD: Daily Charts