- The Australian dollar has gained strength, buoyed by a more favorable global trade sentiment which has heightened risk appetite.
- April saw an addition of 89,000 jobs in Australia, far exceeding the anticipated 20,000 according to the Employment Change Report.
- With improved global trade relations, expectations for a reduction in US Federal Reserve interest rates this year have diminished.
On Thursday, the Australian dollar (AUD) rose against the USD, bouncing back after over a 0.50% drop in the previous session. As global trade issues have lightened, demand for risk-sensitive currencies like the Australian dollar has increased.
The Australian Bureau of Statistics (ABS) reported that employment increased by 89,000 in April, compared to just 36,400 in March, well above the expected estimate. The unemployment rate remained steady at 4.1%, the same as the previous month.
On Wednesday, Iranian senior advisor Ali Shamhani stated that Iran is prepared to finalize a nuclear agreement with US President Donald Trump. This deal reportedly involves Iran committing to not pursue nuclear weapons in exchange for lifting all US sanctions immediately.
During trade discussions in Switzerland over the weekend, the US and China reached a preliminary agreement to substantially reduce tariffs. The deal would see the US cut tariffs on Chinese goods from 145% to 30%, while China would reduce tariffs on American imports from 125% to 10%. This is viewed as a significant step in easing ongoing trade disputes.
The Australian dollar appreciates thanks to a weakening US dollar
- The US Dollar Index (DXY), which gauges the dollar’s performance against six major currencies, was trading lower at around 100.90. Traders await the release of US Retail Sales and Producer Price Index (PPI) data for April later on Thursday.
- The easing of trade tensions globally has heightened optimism, as traders seem less fearful of an impending recession. This shift may lend some stability to the US dollar. Market estimates for Federal Reserve interest rate cuts have also been dialed back. Current data shows a 74% chance of a 25-basis point reduction in September, down from previous expectations for a cut in July.
- In April, the US Consumer Price Index (CPI) rose by 2.3% year-over-year, slightly below the 2.4% increase seen in March and the 2.4% predicted by the market. Core CPI, which eliminates food and energy costs, rose by 2.8%, consistent with earlier figures and expectations. Both CPI measures grew by 0.2% in April.
- US President Trump mentioned on Fox News that he is actively seeking greater access to China, indicating a willingness to negotiate directly with President Xi over potential agreements.
- China’s Consumer Price Index (CPI) fell for the third straight month in April, showing a 0.1% decrease year-over-year, which matched market predictions and falls recorded in March. The Producer Price Index (PPI) reported a year-over-year decrease of 2.7%, lower than market expectations of a 2.5% decline and March’s 2.6% drop.
- Australia’s wage price index grew by 3.4% year-over-year in Q1 2025, exceeding the forecast of 3.2%, and recovering from the slowest growth recorded in the previous quarter since Q3 2022.
- Australian Prime Minister Anthony Albanese was inaugurated for a second term following a significant election win. Key cabinet positions, including those in accounting, diplomacy, defense, and trade, remain unchanged. He will participate in Pope Leo XIV’s inauguration on Sunday, meeting leaders such as European Commission President Ursula von der Leyen to discuss trade relations.
- As global trade tensions have relaxed, investors have tempered expectations for aggressive interest rate cuts in Australia. The market now forecasts the Reserve Bank of Australia (RBA) to lower the cash rate to approximately 3.1% by year-end, up from an earlier forecast of 2.85%. Still, there remains widespread anticipation of a 25-basis point cut in upcoming policy meetings.
The Australian dollar has advanced to nearly 0.6450, bouncing back after hovering around these levels for nine days of EMA
The AUD/USD is currently around 0.6440. Daily chart analysis shows a bullish outlook, with the pair staying above the nine-day exponential moving average (EMA). Furthermore, the 14-day relative strength index (RSI) has stayed above the 50 mark, indicating positive momentum.
This positive trend means the pair might retrace its previous high of 0.6515, which was last seen on December 2, 2024. Crossing beyond this level could lead the way to a seven-month peak of 0.6687 noted in November 2024.
Initial support appears at the nine-day EMA around 0.6429, followed by a 50-day EMA near 0.6355. A downturn below these levels could weaken the outlook for the near to medium term, potentially leading to a greater drop to 0.5914, the last seen level in March 2020.
AUD/USD: Daily Charts
The daily changes in the Australian dollar (AUD) against major currencies are summarized below. It is now strongest against the US dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.22% | -0.16% | -0.39% | -0.11% | -0.23% | -0.18% | -0.40% | |
| EUR | 0.22% | 0.06% | -0.18% | 0.11% | -0.02% | 0.05% | -0.18% | |
| GBP | 0.16% | -0.06% | -0.23% | 0.05% | -0.09% | 0.01% | -0.21% | |
| JPY | 0.39% | 0.18% | 0.23% | 0.29% | 0.16% | 0.22% | 0.00% | |
| CAD | 0.11% | -0.11% | -0.05% | -0.29% | -0.11% | -0.04% | -0.26% | |
| AUD | 0.23% | 0.02% | 0.09% | -0.16% | 0.11% | 0.07% | -0.12% | |
| NZD | 0.18% | -0.05% | -0.01% | -0.22% | 0.04% | -0.07% | -0.21% | |
| CHF | 0.40% | 0.18% | 0.21% | -0.01% | 0.26% | 0.12% | 0.21% |
This summary illustrates the shifts in the Australian dollar against major currencies today. It’s currently the strongest versus the US dollar.
