Australian Dollar remains subdued despite Trump confirmation of US-China trade discussions – FXStreet

• The Australian dollar barely moves as trading activities remained tamped due to Good Friday holidays.
• Trump has hit a breach of optimism, suggesting that a trade deal with China could be finalized within three to four weeks.
• Federal Reserve Chairman Jerome Powell warned that combining a weak economy with sustained inflation could increase the risk of stagflation.

The Australian Dollar (AUD) remains restrained on Friday after a seven-day winning streak. However, the AUD/USD pair is USD (USD) amid growing concern over the economic impact of tariffs; US (Us). Market participants are closely monitoring the development of US trade negotiations, but trading activities are expected to be curbed due to Good Friday holidays.

Late Thursday, US President Donald Trump said China had multiple overtures, adding, “I don’t want to be higher with Chinese tariffs. If China’s tariffs get higher, people won’t buy them.” Trump has expressed optimism that he will reach a trade deal with China within three to four weeks.

The AUD received a boost after President Trump announced a waiver of key tech products from the newly proposed “mutual” tariffs. These exemptions cover items such as smartphones, computers, semiconductors, solar cells, flat panel displays and more – a favorite taste produced in China, primarily Australia’s largest trading partner and an important consumer of its goods exports.

In the minutes of the Reserve Bank of Australia (RBA) meetings between March 31 and April 1, continued uncertainty regarding the timing of the next interest rate adjustments. The board believed it met the appropriate points to consider monetary policy in May, but emphasized that no prior decisions have been made. The board also pointed out both the upside-down and negative risks facing Australia’s economy and inflation trajectory.

Australian dollars struggle to hold profits amid modest trading terms

• The US Dollar Index (DXY), which measures USD against a basket of six major currencies, is trading low at around 99.30 at the time of writing. However, the US dollar has found some support following Hawkish’s comments from Federal Reserve Chairman Jerome Powell. Jerome Powell warned that slow economy and sustained inflation could challenge the Fed’s purpose and increase the risk of stagflation.
• According to the CME FedWatch tool, money market traders are currently priced at around 86 basis points of Fed rate reduction by the end of 2025, with the initial cut expected in July.
• On the Labor Front, the U.S. Department of Labor reported Thursday that initial unemployment claims for the week ending April 12 fell to 215,000, down from the revised 224,000 (originally 223,000) the week before. However, in the week ending April 5th, continued unemployed claims rose 1.885 million from 41,000.
• 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%.
• Australia’s unemployment rate rose to 4.1% in March, with market forecasts just below 4.2%. Meanwhile, the employment change was at 32.2k against a consensus forecast of 40k.
• Australia’s Westpac Leading 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 foreign ministry said Thursday that if the US continues to make tariff-related provocations, China will simply ignore them.
• 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, with a 7.7% increase compared to 5.6% forecast and 5.9% printing in February.

Australian Dollar can test psychological 0.6400 levels near 4 months’ height

The AUD/USD pair hovered at near 0.6390 on Friday with a daily chart Indicator It refers to bullish prejudice. The pair holds above the nine-day exponential moving average (EMA), while the 14-day relative strength index (RSI) exceeds the neutral 50 mark.

Conversely, the AUD/USD pair was able to find important resistance at a psychological level of 0.6400, followed by a four-month height of 0.6408, last reached February 21st.

On the downside, initial support is at 9-day EMA of 0.6311 and additional support is at 50-day EMA of nearly 0.6283. Breaks below these levels will weaken the short-term bullish outlook and open the doors to decline deeper towards the 0.5914 zone, the lowest level since March 2020.

AUD/USD: Daily Charts