The Australian Dollar Remains Stable Amid China’s Loan Prime Rate Announcement
- The People’s Bank of China reveals adjustments to its loan prime rates.
- The PBOC keeps its 1-year and 5-year LPRs steady at 3.00% and 3.50% on Friday.
- The US dollar might regain strength due to potential direct involvement in Middle Eastern conflicts.
The Australian dollar (AUD) managed to recover some losses on Friday. The AUD/USD exchange rate remained solid following China’s interest rate announcements. Still, the upside may be somewhat limited given the diminishing risk appetite amid rising tensions in the Middle East.
The People’s Bank of China chose to leave the loan prime rate (LPR) unchanged on Friday, with the rates for 1 year and 5 years standing at 3.00% and 3.50%, respectively.
US intelligence reports suggest that, even with a significant stockpile of uranium, Iran has not yet decided to pursue nuclear weapons. Yet, the New York Times pointed out that if US forces were to attack Iran’s Fordo uranium enrichment site or if significant leaders in Iran were harmed, it could push Iran towards weapon production.
The US dollar (USD) gained traction as demand grew for safe assets, fueled by concerns over possible US involvement in battles involving Israeli and Iranian forces. The conflict between Israel and Iran continues, marking its seventh day of escalating air attacks. White House spokesperson Karoline Leavitt indicated that President Trump is expected to make a decision about military action against Iran within two weeks.
According to the Australian Bureau of Statistics, there was a decline in employment changes by 2.5k in May, compared to a significant increase of 87.6k from a previous revision. The unemployment rate remained steady at 4.1% in May.
The Australian Dollar Rises While the US Dollar Experiences Technical Pullbacks
- The US Dollar Index (DXY), measuring the USD’s value against six major currencies, is currently around 98.60. Traders are eyeing the Federal Reserve’s monetary policy report due out on Friday.
- The Federal Reserve decided to keep interest rates at 4.5% in June, as widely anticipated. The Federal Open Market Committee is considering a rate cut of about 50 basis points by late 2025.
- Chairman Jerome Powell of the Federal Reserve cautioned that continued policy uncertainty will keep rates stable, with any cuts contingent on improvements in labor and inflation data.
- Bloomberg reported from an unnamed source about US preparations for a potential strike against Iran. The Wall Street Journal added that President Trump approved an attack plan for Iran but is waiting to see if Tehran will retreat from its nuclear ambitions.
- This past Tuesday, Trump called for Iran to “unconditionally surrender” via social media. Investors are becoming increasingly anxious about possible US engagement in the Israeli-Iranian conflict.
- G7 leaders released a joint statement underscoring that Iran must not develop nuclear weapons, emphasizing that resolving the Iranian dilemma could avert further regional hostilities.
- In China, retail sales increased by 6.4% year-on-year in May, exceeding the expected 5.0% and the 5.1% growth noted in April. Industrial production rose 5.8% year-on-year but fell short of the forecasted 5.9%.
- China’s National Bureau of Statistics indicated that the domestic economy is likely to remain stable in the first half of 2025, though it may face challenges due to uncertain trade policies starting in the second quarter.
Australian Dollar Tests 9-Day EMA Resistance Near 0.6500
The AUD/USD duo is trading around 0.6480 on Friday. Analyses of daily charts suggest a return to a bullish trend, with the pair attempting to bounce back towards an upward channel pattern. The 14-day relative strength index (RSI) is just above the 50 mark, indicating a growing bullish tone. However, the pair remains below the nine-day exponential moving average (EMA), hinting at weak short-term price momentum.
A successful move back into the channel could strengthen the bullish sentiment, testing the nine-day EMA resistance level of 0.6492, with potential support. This might then lead to a test of the seven-month high recorded on June 16.
On the flip side, if the AUD/USD pair dips, it could target the 50-day EMA near 0.6436. A breach below this level could weaken medium-term momentum and push the pair down towards approximately 0.5914, marking the lowest point since March 2020.
AUD/USD: Daily Charts
Current Australian Dollar Exchange Rates
Below are today’s changes in the value of the Australian Dollar (AUD) against major currencies, showing that it was strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.22% | -0.16% | -0.15% | -0.15% | -0.28% | -0.08% | -0.02% | |
| EUR | 0.22% | 0.03% | 0.07% | 0.07% | 0.10% | 0.15% | 0.21% | |
| GBP | 0.16% | -0.03% | 0.14% | 0.05% | 0.08% | 0.11% | 0.18% | |
| JPY | 0.15% | -0.07% | -0.14% | 0.05% | -0.15% | -0.09% | 0.06% | |
| CAD | 0.15% | -0.07% | -0.05% | -0.05% | -0.10% | -0.17% | 0.13% | |
| AUD | 0.28% | -0.10% | -0.08% | 0.15% | 0.10% | 0.32% | 0.10% | |
| NZD | 0.08% | -0.15% | -0.11% | 0.09% | 0.17% | -0.32% | 0.06% | |
| CHF | 0.02% | -0.21% | -0.18% | -0.06% | -0.13% | -0.10% | -0.06% |
The table reflects the daily changes in major currency values against the Australian dollar, demonstrating its strongest showing against the New Zealand dollar.
