- The Australian dollar remains stable despite the release of a soft Westpac major index on Wednesday.
- China’s GDP grew year-on-year at 5.4% in the first quarter, exceeding the expected 5.1%, maintaining a stable pace of expansion.
- The US dollar remains muted prior to the release of retail sales data in March later that day.
The Australian Dollar (AUD) is USD (USD) In Wednesday’s sixth consecutive session, the AUD/USD pair holds the company after the release of the Australian Westpac Reading Index. The index’s six-month annual growth rate has been eased to 0.6% from 0.9% in February, forecasting economic momentum compared to trends over the next three to nine months.
China’s economy grew at an annual rate of 5.4% in the first quarter of 2025, consistent with the pace seen in the fourth quarter of 2024, exceeding market expectations of 5.1%. Quarterly, GDP rose 1.2% in the first quarter and 1.6% in the last quarter, not reaching the forecast 1.4% increase.
Meanwhile, China’s retail sales skyrocketed 5.9% year-on-year, beating expectations of over 4.2% from 4% in February. Industrial production is also excellent, up 7.7% compared to 5.6% forecast 5.9% printing in February.
The AUD also elicited support from improved global risk sentiment after President Donald Trump excluded key technological products from newly proposed “mutual” tariffs. The exemption (covers smartphones, computers, semiconductors, solar cells and flat panel displays) is highly applicable to products manufactured in China, Australia’s largest trading partner and the leading buyer of its products.
Australia’s 10-year government bond yields fell to 4.33% as investors digested the Reserve Bank of Australia (RBA) within minutes of meetings from March 31 to April 1. The minutes show that Q1 data shows that average inflation below 3% is trimmed, indicating that consumer demand appears to be recovered.
RBA The May meeting could be a good time to revisit monetary policy, but it showed that no decision has been made yet. The market is currently priced at a 25 point rate reduction in May, with approximately 120 basis points expected to ease annually. The focus now shifts to Thursday’s employment report, providing key labor market signals and could impact the RBA’s next move.
The US dollar remains calm amid eroding investor trust.
- The US Dollar Index (DXY), which tracks USD against a basket of six major currencies, is trading low at nearly 99.80 at the time of writing. Later that day, US retail sales data will be released for March, potentially providing insight into how increasing tariff concerns are affecting consumer spending.
- A recent consumer sentiment survey by the Federal Reserve Bank of New York shows a sharp rise in the number of households expecting higher inflation, lower employment outlook and worsening credit conditions over the coming months.
- Atlanta Federal President Rafael Bostic said in an early market session on Tuesday that the US Central Bank is on a long road to reaching its 2% inflation target, raising questions about the market’s expectations for additional interest rate cuts.
- The University of Michigan Sentiment Index fell to 50.8 in April, but its one-year inflation forecast surged to 6.7%. The US Producer Price Index (PPI) rose 2.7% year-on-year in March, down from 3.2% in February, and the core rate eased to 3.3%. Jobless’s claims ticked a maximum of 223,000, but continued claims fell to 1.85 million.
- The escalation of trade tensions between the US and China has revived concerns about a potential global economic slowdown. On Friday, China’s Treasury Ministry announced a sharp rise in tariffs on US goods, raising it from 84% to 125%. The measure has responded to President Trump’s previous move to raise tariffs on Chinese imports to 145%.
- Inflation in the US Consumer Price Index (CPI) was 2.4% year-on-year in March, below market forecast of 2.6% from 2.8% in February. The core CPI, which excludes food and energy prices, is up 2.8% per year compared to the previous 3.1%, with a 3.0% estimate missing. Each month, the Headline CPI fell 0.1%, while the Core CPI rose 0.1%.
- The People’s Bank of China (PBOC) is expected to implement further currency easing in the second quarter of 2025. This includes a potential 15 basis points reduced to the loan prime rate (LPR), and a minimum of 25 basis points reduction in the reserve requirement ratio (RRR). According to city analysts cited in the Reuters report, there is a growing possibility that domestic stimulus packages will be accelerated in response to external pressure mounts.
The Australian Dollar holds profits of nearly 0.6350 due to sustained bullish bias
The AUD/USD pair hovered at the 0.6350 level on Wednesday, with daily chart technical showing bullish prospects. The pair continues to trade beyond both the 9-day and 50-day index moving average (EMA), while the 14-day relative strength index (RSI) is held above the neutral 50 mark, supporting ongoing upward momentum.
Conversely, the break above 0.6400, a psychological barrier, was able to pave the way for a four-month-high retest at 0.6408, the last seen on February 21st.
The initial support is at a 50-day EMA, close to 0.6273, followed by an EMA of around 0.6262 for the next nine days. Clear drops below these levels can challenge short-term bullish structures and open up a pathway towards a minimum of 0.5914 areas since March 2020, and a critical psychological mark of 0.5900.
AUD/USD: Daily Charts
Australian dollar prices today
The table below shows the rate of change in the Australian Dollar (AUD) for today’s listed major currencies. The Australian dollar was the strongest against the US dollar.
| USD | EUR | GBP | JPY | CAD | aud | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.80% | -0.32% | -0.56% | -0.20% | -0.27% | -0.31% | -1.08% | |
| EUR | 0.80% | 0.51% | 0.23% | 0.60% | 0.77% | 0.51% | -0.27% | |
| GBP | 0.32% | -0.51% | -0.30% | 0.10% | 0.27% | -0.00% | -0.72% | |
| JPY | 0.56% | -0.23% | 0.30% | 0.40% | 0.64% | 0.34% | -0.52% | |
| CAD | 0.20% | -0.60% | -0.10% | -0.40% | 0.21% | -0.08% | -0.81% | |
| aud | 0.27% | -0.77% | -0.27% | -0.64% | -0.21% | -0.29% | -0.99% | |
| NZD | 0.31% | -0.51% | 0.00% | -0.34% | 0.08% | 0.29% | -0.72% | |
| CHF | 1.08% | 0.27% | 0.72% | 0.52% | 0.81% | 0.99% | 0.72% |
The heatmap shows the rate of change of each other’s major currencies. The base currency is selected from the left column, and the estimated currency is selected from the top row. For example, if you select Australian dollars from the left column and move along the horizon to US dollars, the rate of change shown in the box represents AUD (base)/USD (QUOTE).
Australian Dollar FAQ
One of the most important factors in the Australian Dollar (AUD) is the interest rate level set by the Reserve Bank of Australia (RBA). As Australia is a resource-rich country, another important factor is the price of iron ore, the biggest export. The health of China’s biggest trading partner is Australia’s inflation, its growth rate and trade balance. Market sentiment – Whether investors are taking on riskier assets (risk-on) or seeking safe haven (risk-off) is another factor in risk-on positive for AUD.
The Reserve Bank of Australia (RBA) affects the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This affects the level of interest rates across the economy. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up and down. Compared to other major central banks, relatively high interest rates support AUD, the opposite of relatively low. RBAs can also use quantitative relaxation and tightening to influence credit conditions, along with previous Aud negative and the latter positives.
As China is Australia’s largest trading partner, the health of China’s economy has a major impact on the value of the Australian Dollar (AUD). If the Chinese economy is on track, they will buy more raw materials, goods and services from Australia, raising demand for AUD and increasing its value. The opposite is when the Chinese economy is not growing as fast as expected. Therefore, positive or negative surprises in China’s growth data often have a direct impact on the Australian dollar and its pair.
Iron ore is Australia’s largest export, with China as its main destination accounting for $118 billion a year, according to data from 2021. Therefore, iron ore prices could be a driver for the Australian dollar. Generally, as iron ore prices rise, so does AUD as aggregate demand for the currency increases. If iron ore prices fall, the opposite is true. Also, higher iron ore prices tend to be more likely to be positive for Australia’s trade balance, which is also positive for AUD.
Trade balances, the difference between what a country acquires from exports and what it pays for imports, are another factor that can affect the value of the Australian Dollar. If Australia produces a very popular export, the currency acquires pure value from the surplus demand generated from foreign buyers seeking to purchase the export, compared to what they spend to buy the import. Therefore, a positive net trade balance strengthens the AUD and has the opposite effect if the trade balance is negative.
