Australian Dollar weakens amid heightened global risk sentiment – FXStreet

• The Australian dollar is grateful despite intensifying trade tensions.
• PBOC has injected $300 billion through a one-year medium-term lending facility (MLF), stabilizing at 2%.
• President Trump said tariffs in Canada and Mexico will “move ahead.”

The Australian Dollar (AUD) will recover daily losses as the US Dollar (USD) weakens amid declining yields at the US Treasury on Tuesday. Investors are eager to Australia's monthly inflation report on Wednesday as they are expected to provide important insights into future courses in monetary policy after the Reserve Bank of Australia (RBA)'s recent Hawkish rate cuts I'm predicting it.

The People's Bank of China (PBOC) injected $300 billion on Tuesday through a one-year medium-term lending facility (MLF) to keep the fee at 2%. Additionally, PBOC injected CNY318.5 billion from a 7-day reverse repos of 1.50%, consistent with previous rates. Given the close trade relations between China and Australia, changes in the Chinese economy could have an impact on the Australian dollar.

As President Donald Trump said late Monday that he wiped out US tariffs on imports from Canada and Mexico, he said that the one-month delay next week will expire, US tariffs on US imports will “move forward.” , AUD/USD pairs face challenges associated with increased risk emotions. Trump reiterated his plan to impose so-called mutual tariffs, claiming that the US has been “used” by foreign countries.

The AUD received support as Australia's close trading partner China issued its 2025 annual policy statement on Sunday. The statement details strategies to advance rural reform and promote comprehensive rural revitalization. Additionally, China's state-backed developers are actively increasing land purchases at premium prices, due to government relaxation of housing price restrictions to stimulate the problematic real estate market.

Australian dollars remain curbed due to increased risk aversion

• The US Dollar Index (DXY), which measures the US dollar against six major currencies, fell to nearly 106.50 with two- and 10-year yields, with yields falling to 4.14% and 4.37% at the time of writing, respectively. Masu.
• Federal Reserve Bank of Chicago President Austan Ghoolsby said Monday that the US Central Bank needs to be more clear before considering cutting interest rates.
• On Friday, President Trump signed a memorandum dictating the US Foreign Investment Committee (CFIU) to limit Chinese investment in the strategic sector. Reuters cited White House officials, the National Security Memorandum of Understanding exposes foreign investments while protecting US national security interests from potential threats posed by foreign enemies like China. He said he was trying to encourage it.
• The US combined PMI fell to 50.4 in February, down from 52.7 the previous month. In contrast, manufacturing PMI for February rose to 51.6 from 51.2 in January, surpassing its forecast of 51.5. Meanwhile, the service PMI fell from 52.9 in January to 49.7 in February, not below the expected 53.0.
• The first US unemployment claim for the week ending February 14th rose to 219,000, exceeding the expected 215,000. Meanwhile, continued unemployment claims rose to 1.869 million, slightly below the 1.87 million forecast.
• The Reserve Bank of Australia (RBA) cut its official cash rate (OCR) by 25 basis points last week to 4.10%. Reserve Bank of Australia (RBA) Governor Michelle Bullock acknowledged the impact of high interest rates, but warned that it was too early to declare a victory over inflation. She also highlighted the strength of the labor market and made it clear that despite market expectations, future interest rate reductions are not guaranteed.

Technical Analysis: 9 Day EMA Barrier with Australian Dollar Test Near 0.6350

The AUD/USD traded nearly 0.6340 on Tuesday, moving within rising channels reflecting bullish market sentiment. The 14-day relative strength index (RSI) is above 50, supporting a positive outlook.

Conversely, the AUD/USD pair tests immediate barriers with a 9-day exponential moving average (EMA) of 0.6343. Successful breaks above this level can improve bullish bias and support pairs to test important psychological resistance at 0.6400, with the next hurdle making the ascending channel upper limit of 0.6440 to about 0.6440.

The AUD/USD pair can find immediate support at 0.6329 for 14 days of EMA, matching the channel's lower bound.

AUD/USD: Daily Charts