- The Australian dollar has gained strength following Prime Minister Anthony Albanese’s victory in securing a second three-year term during the 2025 federal elections.
- Australia’s Judo Bank Combined PMI reported a figure of 51.0 in April, indicating its seventh month of expansion.
- President Trump has confirmed he will not replace Federal Reserve Chairman Powell before his term ends in May 2026.
The Australian dollar (AUD) is seeing upward movement against the US dollar (USD) for the second straight session on Monday. The AUD/USD exchange rate is benefiting from Prime Minister Anthony Albanese’s success in the recent federal election, achieving a notable win on Saturday.
Labour Party leader Albanese is claiming a parliamentary majority with over 45% of the votes counted. He has pledged to implement relief measures for living costs, navigate global trade tensions, and support renewable energy along with tax cuts, housing, and healthcare expenses. But these initiatives may contribute to inflation and limit the Reserve Bank of Australia’s (RBA) ability to lower interest rates.
In terms of economic indicators, the TD-MI inflation gauge rose by 0.6% month-on-month in April, slightly down from March’s 0.7%, marking a second consecutive monthly increase. Annual inflation also increased to 3.3%, up from the previous 2.8% rate.
Australia’s Judo Bank Combined Purchase Manager Index (PMI) recorded a reading of 51.0 in April, representing continuous growth for the seventh month, although this was a slowdown from March’s 51.6. The Service PMI also hit 51.0, marking 15 months of growth.
On an international note, the US-China trade situation is evolving as the Chinese Commerce Department mentioned their consideration of a US proposal to resume trade negotiations after President Trump’s assertion that talks were ongoing. However, Trump indicated he would not be meeting with Chinese President Xi Jinping this week. Given Australia’s strong trade relations with China, any rising tensions between the US and China may negatively affect the AUD.
Meanwhile, US businesses contemplating transferring production back home may need to rethink their plans in light of Trump’s comments regarding tariffs. He remarked over the weekend that high tariffs could ultimately hinder business dealings, suggesting he might lower them in the future.
Australian dollar remains strong as the US dollar struggles, ahead of ISM services PMI announcement
- The US Dollar Index (DXY), which compares the USD against a basket of six major currencies, is trading close to 99.80, marking a decline for the second consecutive day. Traders are expected to keep an eye on the upcoming US ISM Services PMI for further insights.
- President Trump has confirmed that he will retain Federal Reserve Chairman Jerome Powell until the latter’s term concludes in May 2026, while expressing a desire for eventual interest rate reductions.
- Trump has also announced intentions to direct US trade representatives to initiate a proposal for imposing a 100% tariff on diplomatic production films.
- In April, the US Non-Agricultural Payroll (NFP) report highlighted an unexpected job increase of 177,000, after a revised rise of 185,000 jobs in March. The market had anticipated a rise of about 130,000 jobs. The unemployment rate remained stable at 4.2%, with average hourly earnings increasing by 3.8% year-on-year, consistent with prior figures.
- US Treasury Secretary Janet Yellen cautioned that Trump’s tariffs could negatively impact the US economy. Treasury Secretary Scott Bessent indicated that an inverted yield curve further supports the case for Federal Reserve rate cuts.
- The Australian Bureau of Statistics reported a trade surplus of AUD 6.9 billion in March, significantly higher than the expectation of AUD 3.13 billion, and well above the revised February figure of AUD 2.85 billion. This strong surplus was attributed to a 7.6% rise in exports and a 2.2% decline in imports that month.
- Australia’s retail sales indicator showed an increase of 0.8% in March, revised from a prior estimate of 0.2%. However, this was less than the expected 0.4% rise, leaving market expectations somewhat unmet.
- Jim Chalmers, Australia’s treasurer, noted that the market anticipates further interest rate reductions. He mentioned, “The market is looking forward to more interest rate cuts following the inflation figures,” asserting that recent data will likely not alter market anticipations significantly.
- Early signs of inflationary pressures in 2025 have tempered expectations for further monetary easing by the RBA. A 25 basis point rate cut is projected for May as policymakers strategize to address the economic impacts of new US tariffs.
- According to Bloomberg, China is evaluating a new round of trade discussions with the US, confirmed by the Commerce Department’s statements about the possibility of resuming negotiations. However, China is believed to be conducting an internal review, insisting that the US should rectify its tariff-related actions.
Australian dollar approaches a five-month high, trading near 0.6500
The AUD/USD pair is trading around 0.6460 on Monday, maintaining a bullish outlook. The pair remains above the nine-day exponential moving average (EMA), while the 14-day relative strength index (RSI) stays comfortably above 50, indicating sustained upward momentum.
On the flip side, the AUD/USD could potentially reach a five-month high at 0.6515, with the psychological barrier of 0.6600 looming.
This pair can find initial support at the nine-day EMA of 0.6408 and then at the 50-day EMA of 0.6326. Breaks below these levels could jeopardize bullish prospects and take the pair to lows not seen since March 2020, possibly around 0.5914.
AUD/USD: Daily Overview
(This story was revised at 02:50 on May 5th, and the first line of technical analysis refers to the AUD/USD pair trading around 0.6460 on Monday, not Thursday.)
Current Australian dollar Rates
The following table shows the fluctuations in the Australian Dollar (AUD) against major currencies today. The AUD was notably strong against the Canadian dollar.
| USD | EUR | GBP | JPY | CAD | aud | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.03% | -0.26% | -0.40% | -0.02% | -0.25% | -0.50% | -0.31% | |
| EUR | 0.03% | 0.05% | -0.10% | 0.28% | 0.05% | -0.20% | -0.01% | |
| GBP | 0.26% | -0.05% | -0.36% | 0.24% | 0.00% | -0.25% | -0.06% | |
| JPY | 0.40% | 0.10% | 0.36% | 0.38% | 0.16% | -0.02% | 0.19% | |
| CAD | 0.02% | -0.28% | -0.24% | -0.38% | -0.53% | -0.48% | -0.30% | |
| aud | 0.25% | -0.05% | -0.01% | -0.16% | 0.53% | -0.25% | -0.06% | |
| NZD | 0.50% | 0.20% | 0.25% | 0.02% | 0.48% | 0.25% | 0.18% | |
| CHF | 0.31% | 0.01% | 0.06% | -0.19% | 0.30% | 0.06% | -0.18% |
The change in rates among major currencies is shown in the heatmap. The base currency is from the left column, and the target currency is from the top row. For example, selecting AUD from the left and moving across to USD indicates the rate of change shown in that box represents AUD to USD.
Economic Indicators
ISM Services PMI
The ISM’s Monthly Service Purchase Manager Index (PMI) is a vital measure of business activity in the US services sector, which plays a significant role in the economy. This index arises from surveys of US supply executives drawing from their respective organizations’ data, reflecting changes this month compared to the last. Readings above 50 indicate expansion in the service economy, which is usually seen as a positive for the US dollar (USD). Conversely, readings below 50 signify a decline, interpreted as negative for the USD.
