- The Australian dollar is showing signs of progress in easing global trade tensions.
- Despite positive reports on the Australian labor market in April, the AUD may still encounter some hurdles.
- The US dollar remains stable within a tight range, with recent mixed economic data causing varied reactions in the market.
The Australian Dollar (AUD) is poised to end a two-day decline against the US Dollar (USD) as it benefits from a reduction in global trade tensions. A preliminary agreement appears to have been struck between the US and China. This agreement would lower tariffs on Chinese goods from 145% to 30%, while also decreasing US tariffs on Chinese imports from 125% to 10%. There’s also renewed optimism following discussions around potential US nuclear deals.
However, the AUD faces challenges, possibly due to reports indicating that the Trump administration may add several Chinese chipmakers to its export blacklist, known as the “entity list.” This could have serious repercussions for Australia, given its trade ties with China.
According to the Financial Times, officials from the Trump administration expressed worries that imposing such export controls at this time could derail the recent trade agreements established during negotiations in Geneva over the weekend.
Despite the strong employment growth in April reported in Australia, the AUD has had a tough time. Even with the US dollar’s continuation of its trend, the AUD/USD pair has struggled. This has fueled speculation that the Federal Reserve might consider cutting interest rates in the near future.
Australian dollar rises as US dollar weakens amid improved risk sentiment
- The US Dollar Index (DXY), which measures the greenback against a basket of six major currencies, is currently around 100.60. This week’s US economic data has sent mixed signals, revealing slower growth vigor while still showing resilience, which confines the dollar to a limited trading range.
- The US Producer Price Index (PPI) increased by 2.4% year-on-year in April, down from 2.7% in March, which was below the anticipated 2.5%. Excluding food and energy, the core PPI rose by 3.1%, compared to 4% previously. Monthly figures indicated a 0.5% drop in PPI and a 0.4% decline in Core PPI.
- According to the U.S. Department of Labor, initial unemployment claims for the week ending May 10 were 229,000, consistent with revisions and in line with expectations. Meanwhile, continuing claims rose by 9,000, reaching 888,000 in the week ending May 3.
- The US Consumer Price Index (CPI) rose by 2.3% year-on-year in April, slightly below March’s 2.4% and short of the 2.4% forecast. Core CPI, excluding food and energy, rose by 2.8%, matching previous figures and predictions. In April, both the overall CPI and Core CPI increased by 0.2% month-on-month.
- US President Donald Trump mentioned in an interview that he is actively seeking to enhance access to China and is open to negotiating directly with President Xi regarding potential agreements.
- Data from the Australian Bureau of Statistics indicated that employment rose by 89,000 in April, a significant increase compared to the 36,400 rise in March and well above the forecast of 20,000. The unemployment rate remained stable at 4.1%.
- The seasonally adjusted wage price index in Australia rose by 3.4% year-on-year in Q1 2025, exceeding the market forecast of 3.2% and representing a recovery from the slow wage growth seen in the previous quarter.
- Prime Minister Anthony Albanese was sworn in for a second term following a significant election win. Key positions in cabinet, including those overseeing accounting, foreign affairs, and trade, remained unchanged. Albanese is scheduled to attend the inauguration ceremony of Pope Leo XIV and will engage with leaders to discuss trade relations.
- With the easing of global trade tensions, investor expectations for sharp interest rate cuts in Australia have subsided. The market now anticipates the Reserve Bank of Australia (RBA) will lower the cash rate to about 3.1% by year’s end, a revision from the earlier forecast of 2.85%. Nevertheless, there remains a strong expectation for a 25 basis point cut in upcoming policy meetings.
AUD finds support around 0.6400 after holding below EMA for nine days
The AUD/USD is currently trading around 0.6410. Technically, the pair is situated below the nine-day exponential moving average (EMA), indicating a bearish stance on the daily chart. Still, the 14-day relative strength index (RSI) stays above the 50 threshold, suggesting ongoing bullish momentum despite the downward pressure.
Support is immediately positioned at the psychological level of 0.6400, followed by the EMA around 0.6355 for the 50-day period. A significant drop below these thresholds could worsen short to medium-term projections, leading to a potential decline to 0.5914, a level last observed in March 2020.
On the upside, there’s resistance at the nine-day EMA near 0.6417. Surpassing this could lead to a retest of the six-month high of 0.6515 reached in December 2024. A sustained rally beyond this point may aim for a seven-month high of 0.6687.
AUD/USD: Daily Charts
Australian dollar rates today
The following table shows the changes in the Australian Dollar (AUD) against various major currencies today, with the Australian dollar being notably strong against the US dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.16% | -0.09% | -0.28% | -0.11% | -0.25% | -0.44% | -0.23% | |
| EUR | 0.16% | 0.07% | -0.13% | 0.04% | -0.09% | -0.28% | -0.07% | |
| GBP | 0.09% | -0.07% | -0.19% | -0.02% | -0.16% | -0.35% | -0.15% | |
| JPY | 0.28% | 0.13% | 0.19% | 0.17% | 0.01% | -0.19% | 0.04% | |
| CAD | 0.11% | -0.04% | 0.02% | -0.17% | -0.16% | -0.32% | -0.11% | |
| AUD | 0.25% | 0.09% | 0.16% | -0.01% | 0.16% | -0.18% | 0.02% | |
| NZD | 0.44% | 0.28% | 0.35% | 0.19% | 0.32% | 0.18% | 0.20% | |
| CHF | 0.23% | 0.07% | 0.15% | -0.04% | 0.11% | -0.02% | -0.20% |
The heatmap illustrates the changes in value of each major currency compared to others. The selected base currency is indicated in the left column, while the estimated currency is shown across the top row. For example, if you select the Australian dollar from the left and move horizontally to the US dollar, the rate of change in that box represents AUD (base)/USD (quote).
