- Aud/USD has decreased to nearly 0.6220 due to soft Australian CPI data boosting RBA Dovish betting.
- The Australian CPI in the same period of the previous year rose at a slow pace of 2.4 % in the last quarter of 2024.
- The Fed is sure to announce a suspension with a spell that extends the current policy.
The Aud/USD pair is sharp to 0.6220 in the European session on Wednesday. The Australian pair faces a sharp sales pressure after the release of the Australian Q4 Consumer Price Index (CPI) data, which is softer than Australia. Start reduction of interest rates for Policy Conference in February.
Today's Australian dollar price
The following table shows the change rate of Australian dollar (AUD) to major currency in today. Australian dollars were the strongest for New Zealand dollars.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | Chf | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.25 % | 0.16 % | -0.08 % | 0.17 % | 0.42 % | 0.35 % | 0.20 % | |
| EUR | -0.25 % | -0.09 % | -0.32 % | -0.09 % | 0.17 % | 0.12 % | -0.05 % | |
| GBP | -0.16 % | 0.09 % | -0.25 % | 0.00 % | 0.26 % | 0.20 % | 0.04 % | |
| JPY | 0.08 % | 0.32 % | 0.25 % | 0.24 % | 0.50 % | 0.42 % | 0.28 % | |
| CAD | -0.17 % | 0.09 % | -0.01 % | -0.24 % | 0.25 % | 0.19 % | 0.04 % | |
| AUD | -0.42 % | -0.17 % | -0.26 % | -0.50 % | -0.25 % | -0.06 % | -0.22 % | |
| NZD | -0.35 % | -0.12 % | -0.20 % | -0.42 % | -0.19 % | 0.06 % | -0.16 % | |
| Chf | -0.20 % | 0.05 % | -0.04 % | -0.28 % | -0.04 % | 0.22 % | 0.16 % |
The heat map shows the changing rate of major currencies to each other. Basic currencies are selected from the left row, and the quota is selected from the top line. For example, if you select Australian dollars from the left column and move to the US dollar along the horizon, the change rate displayed in the box is AUD (base)/USD (quote).
The Australian Statistics Bureau reported that in the last quarter of 2024, the inflation pressure rose at a stable pace of 0.2 % in 2024, which was slower than the estimated value of 0.3 %. Compared to the same quarter of the previous year, inflation increased at 2.5 % in the third quarter of 2024, 2.8 % slower than 2.8 %. However, monthly CPIs increased at a faster pace of 2.5 % in December. As expected, it is widely existed within 2 % to 3 % of RBA compared to the 2.3 % increase in November.
Soft Australian inflation has raised the expectation of the market that RBA rotates to relieve policy at the next policy meeting.
On the other hand, the fear that President Donald Trump in the United States (USA) will impose 10 % tariffs on China is a major Chinese trading partner in Australia. On Tuesday, the White House spokeswoman Calorin Rivit reported that the President was still considering 10 % of the tariffs in China.
On the U.S. dollar (USD) front, investors are waiting for the monetary policy of the Federal Reserve (FRB) announced at 19:00 GMT. The Fed is widely expected to stabilize interest rates in a range of 4.25 % to 4.50 %.
Australian dollar FAQ
One of the most important factors of Australian dollar (AUD) is the interest rate set by Australian Bank (RBA). Australia is a country with a rich resources, so another important driver is iron ore, the largest export price. The biggest trade partner Chinese economy is the inflation of Australia, its growth, and trade. balance. Market emotions -whether investors are undergoing more risky assets (risk -on) or whether they are seeking safe Haven (risk -off) is a reasonable factor in the AUD.
Australian Bank (RBA) affects Australian dollars (AUD) by setting interest rates that Australian banks can lend to each other. This affects the level of interest rates in the whole economy. The main goal of RBA is to maintain a 2-3 % stable inflation rate by adjusting interest rates up and down. The relatively high interest rate compared to other major central banks support AUD, the opposite of relatively low. RBA can also affect credit conditions, along with the previous AUD negative and the latter positive, using quantitative easing and tightening.
Since China is the largest trading partner in Australia, the health of the Chinese economy has a significant impact on the value of Australian dollars (AUD). If the Chinese economy is progressing smoothly, you will buy more raw materials, products, and services from Australia, lift the AUD demand and increase its value. The opposition is when the Chinese economy is not growing fast as expected. Therefore, positive or negative surprises in China's growth data often have a direct effect on Australian dollars and their pairs.
Iron ore is the largest export in Australia, and according to data from 2021, China accounts for $ 18 billion annually. Therefore, the price of iron ore can be a driver for the Australian dollar. In general, as the price of iron ore rises, the AUD also increases as total demand for currency increases. If the price of iron ore falls, the opposite is true. In addition, the higher the price of iron ore, the more likely Australian trade balance tends to be positive, but this is also positive.
The trade balance, which is a difference between what the government is acquired from exports and what is paid for import, is another factor that can affect the value of Australian dollars. If Australia creates a very popular export, the currency is purely valuable from surplus demand created by foreign buyers who want to buy exports, compared to those spent to buy imports. I will win. Thus, positive net trade balance will strengthen the AUD and have the opposite effect if the trade balance is negative.
