- As tensions rise in the Middle East, the Australian dollar is expected to decline amid lower risk sentiment.
- Israeli military officials have reported that Israel has conducted attacks on multiple nuclear sites in Iran.
- In the US, the producer price index is anticipated to increase by 0.1% in May, following a previous rise of 0.2%.
The Australian Dollar (AUD) saw a drop against the US Dollar (USD) on Friday, losing over 1%. The decline in the AUD/USD pair can be attributed to growing tensions in the Middle East.
Israeli Defense Minister Israel Katz issued a warning about potential missile and drone strikes following a preemptive attack on Iranian sites. He has declared a state of emergency, stating that Iran’s nuclear ambitions pose a significant threat to Israel.
According to Reuters, President Trump has expanded steel tariffs effective June 23, impacting various imported goods like household appliances. This marks the second occasion that the list of affected products has been broadened.
The Australian dollar may weaken as the US dollar strengthens due to increased demand for safer investments.
- The US Dollar Index (DXY), which gauges the dollar’s value against six major currencies, has begun recovering and is trading higher around 98.10. Consumer sentiment data from Michigan is expected later in the day.
- The US Producer Price Index (PPI) recorded a 0.1% increase in May, contrasting with a downward revision to a 0.2% decline. Additionally, the core PPI, which excludes food and energy, rose by 0.1%, falling short of the forecast.
- On Wednesday, Trump mentioned on True Social that a trade agreement with China is in progress, pending final approval from himself and Xi Jinping. He added, “We get a total of 55% tariffs. China has earned 10%. The relationship is great!”
- China has provided US automakers with only six months of rare earth export licenses, hinting at a strategy to leverage important minerals for future negotiations, as reported by the Wall Street Journal.
- The US Consumer Price Index (CPI) rose 2.4% in May, slightly above the previous figure of 2.3%, but below market expectations of 2.5%. The core CPI, excluding food and energy prices, increased to 2.8% year-on-year, just under the consensus.
- Trump expressed a desire to extend the deadline for trade talks but doubted its necessity. He also mentioned setting a unilateral tariff rate within two weeks.
- On Tuesday, the U.S. Federal Circuit Court of Appeals extended a temporary hold while considering a challenge to a lower court ruling that had blocked tariffs last month, affirming that Trump’s tariffs remain in effect, according to Bloomberg.
- China’s trade balance reached CNY 74.356 billion in May, expanding from a previous surplus, though year-on-year export growth dropped to 6.3%, and imports saw a decline.
- Australia’s trade balance recorded a surplus of 5,413 million in April. Exports declined by 2.4%, while imports rose by 1.1% compared to previous figures.
The Australian Dollar approaches 0.6450 near the 50-day EMA.
The AUD/USD pair was trading around 0.6460 on Friday. Technical analysis suggests a weakening bullish trend as it fell below the lower boundary of its ascending channel. The short-term price momentum appears to be slipping, yet the 14-day relative strength index (RSI) hovers just above 50, hinting at some bullish activity still.
If the AUD/USD pair continues to slide, it might test the 50-day EMA at 0.6423. A breach of this level may apply more downward pressure, potentially pushing it towards a low of 0.5914, a mark unseen since March 2020.
The immediate resistance is observed at the 9-day EMA of 0.6495, followed by a seven-month high of 0.6538 reached on June 5. Should the pair make further gains, it could target a height of 0.6687, with an upward channel resistance around 0.6730.
AUD/USD: Daily Charts
The rate of change in the Australian Dollar (AUD) for today’s major currencies is as follows:
The table below showcases the fluctuations in the Australian Dollar against several major currencies. Currently, the AUD is the weakest against the Swiss franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.45% | 0.45% | 0.17% | 0.22% | 0.76% | 0.77% | -0.15% | |
| EUR | -0.45% | 0.04% | -0.23% | -0.16% | 0.40% | 0.29% | -0.59% | |
| GBP | -0.45% | -0.04% | -0.33% | -0.28% | 0.27% | 0.23% | -0.62% | |
| JPY | -0.17% | 0.23% | 0.33% | 0.09% | 0.61% | 0.59% | -0.30% | |
| CAD | -0.22% | 0.16% | 0.28% | -0.09% | 0.52% | 0.55% | -0.34% | |
| AUD | -0.76% | -0.40% | -0.27% | -0.61% | -0.52% | -0.02% | -0.89% | |
| NZD | -0.77% | -0.29% | -0.23% | -0.59% | -0.55% | 0.02% | -0.86% | |
| CHF | 0.15% | 0.59% | 0.62% | 0.30% | 0.34% | 0.89% | 0.86% |
The heatmap illustrates the fluctuations of major currencies. The base currency is indicated in the left column, while the estimated currency is shown along the top row. For instance, to see the change between Australian dollars and US dollars, reference the corresponding box.
