Australian Dollar climbs as USD slides following Trump inauguration speech

• Aussie pair surges 1% to 0.6255 on Monday.
• Trump administration unveils a measured approach to tariffs.
• Softer USD underpins global equities, bolstering risk appetite.

The marked sell-off in the US Dollar on Monday paved the way for the AUD/USD to gain notable momentum, allowing it to reach multi-day peaks just below the 0.6300 threshold at the start of the week. The movement was part and parcel of markets digesting Donald Trump's inauguration speech signals. This sharp rally came despite lingering questions over the Reserve Bank of Australia's (RBA) policy path and mixed domestic fundamentals, highlighting the influence of a broadly weaker Greenback on high-beta currencies like the Aussie.

Daily digest market movers: Aussie recovers mainly due to a softer USD

• The Aussie is gaining traction as the US Dollar loses traders' interest at the start of the week. The US Dollar Index revisited levels beneath 108.00 on Monday, reflecting a pronounced bout of risk-on sentiment.
• Following his inauguration, President Donald Trump directed federal agencies to examine persistent trade imbalances and consider corrective actions -- particularly toward nations like China, Canada and Mexico, although a taskforce will first evaluate potential tariffs.
• Global stocks hold firm, buoyed by hopes that the new administration's initially measured stance on trade may avert major upheavals.
• Market speculation concerning a Fed rate cut by mid-year grows with the CME FedWatch Tool assigning a 55% chance to a hold in May before a possible move by June.
• On the local front, the Aussie may suffer from a mixed economic outlook, or if the RBA eventually gives hints that it will start cutting rates in Q1 of 2025.

AUD/USD technical outlook: Bulls eye higher ground amid choppy swings

The AUD/USD pair jumped by 1% to 0.6255 on Monday, extending its recovery from previous setbacks. The Moving Average Convergence Divergence (MACD) histogram continues printing green bars, hinting at building bullish momentum.

Meanwhile, the Relative Strength Index (RSI) stands in the upper 50s near 59, having climbed sharply and reinforcing a positive tone. If the pair can consolidate above the mid-0.6200s, it could set its sights on the psychological 0.6300 barrier, although persistent policy and growth concerns may still temper any further upside.