Created
: 2025.01.21
- English
- English
- What's Myforex
- Share
- Use tools
- Get information
- What's New
- Help center
- About us
- Customer support
- Terms and policies
-
-
PortfolioShare your portfolio and performance in real time -
Events & contestsEvents and contests held by retail brokers around the world
-
-
Real-time spread comparisonCompare spreads of major retail brokers in real time -
Volatility analysisVisualize volatility as a measure of daily market activity -
Swap point comparisonCompare buy and sell swap values for each broker by symbol -
Market rates & chartsCheck prices for all instruments offered by each broker -
IndicatorsProviding in-house developed indicators for MT4/MT5 -
Trading calculatorsCalculation tools for each broker to help you trade
-
-
World FX newsLatest news on forex and cryptocurrencies from around the world -
Broker informationTrading information of retail brokers worldwide -
MetaTrader4/5 user guideUser guide collection for the latest MetaTrader4/5 -
Economic calendarRelease calendar for indicators from official sources of major economies
AUD/USD Price Forecast: Trump's tariff threats boost US Dollar
World FX news
Breaking news
AUD/USD Price Forecast: Trump's tariff threats boost US Dollar
New
2025.01.21 23:12
2025.01.21 23:12
2025.01.21 23:12
- AUD/USD slumps to near 0.6220 as Trump threatens to impose tariffs on China.
- The RBA is expected to start reducing interest rates in February.
- The US Dollar recovers sharply as Trump confirms that the tariff plan is on track.
The AUD/USD pair falls sharply to near 0.6220 in Tuesday's North American session after a couple of failed attempts to revisit the key resistance of 0.6300. The Aussie pair slumps as United States (US) President Donald Trump threatens to raise tariffs on China, a move that would also hurt the Australian export sector, being the leading trading partner of China.
Trump's presidential memo showed that he directed federal agencies to evaluate trade relationships with China and other North American economies.
Meanwhile, growing expectations that the Reserve Bank of Australia (RBA) could pivot to policy-easing in the policy meeting in February. RBA's dovish bets swelled after the board said in the December meeting that it gained some confidence that inflation is moving sustainably towards the target.
The US Dollar (USD) rebounds sharply and recovers most of Monday's losses as Trump confirms that the tariff plan is still on. The US Dollar Index (DXY), which gauges the Greenback's value against six major currencies, bounces back from an almost two-week low of 108.00.
AUD/USD discovers buying interest after revisiting an over four-year low of 0.6170. However, the outlook of the pair is still bearish as the 50-week Exponential Moving Average (EMA) near 0.6526 is sloping downwards.
The 14-week Relative Strength Index (RSI) bounces back after turning oversold near 30.00. However, the overall momentum will remain bearish until it stays inside the 20.00-40.00 range.
Going forward, the pair would face more downside if it fails to hold the January 13 low of 0.6131. This will push it lower to the round-level support of 0.6100 and the April 2020 low of 0.5990.
On the flip side, a decisive breakout above the January 6 high of 0.6302 will open doors to the December 18 high of 0.6340 and the round-level resistance of 0.6400.
AUD/USD weekly chart
Australian Dollar FAQs
One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment - whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) - is also a factor, with risk-on positive for AUD.
The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive.
China is Australia's largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs.
Iron Ore is Australia's largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD.
The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.
Last updated
: 2025.01.21
Related articles
US President Donald Trump:
50 minutes agoEUR/GBP Price Analysis: Pair weakens toward critical 200-day SMA
2025.01.24 00:42Canada: Goods spending got a major boost from car sales in Q4 - National Bank of Canada
2025.01.24 00:37USD/JPY declines on soft US jobs data, eyes on Trump
2025.01.24 00:27Silver Price Forecast: XAG/USD plummets to near $30 amid delay in Trump's tariff hike plans
2025.01.23 23:32AUD/USD oscillates below 0.6300 as investors await more clarity on Trump's tariff policy
2025.01.23 22:45
FXStreet is a forex information website, delivering market analysis and news articles 24/7.
It features a number of articles contributed by well-known analysts, in addition to the ones by its editorial team.
Founded in 2000 by Francesc Riverola, a Spanish economist, it has grown to become a world-renowned information website.
Was this article helpful?
We hope you find this article useful. Any comments or suggestions will be greatly appreciated.
We are also looking for writers with extensive experience in forex and crypto to join us.
please contact us at [email protected].
Thank you for your feedback.
Thank you for your feedback.
Most viewed
US Dollar looks for direction as Trump readies Davos remarks
The US Dollar has turned flat during the US trading session on Thursday.
New
2025.01.24 03:10US President Donald Trump:
United States (US) President Donald Trump ran through a long list of grievances while delivering his remarks during the World Economic Forum hosted in Davos, Switzerland on Thursday.
New
2025.01.24 02:20EUR/GBP Price Analysis: Pair weakens toward critical 200-day SMA
The EUR/GBP pair edged lower on Thursday, slipping to 0.8445 as it drifts closer to the 200-day Simple Moving Average (SMA), positioned around 0.8420.
New
2025.01.24 00:42Canada: Goods spending got a major boost from car sales in Q4 - National Bank of Canada
November's retail sales report was rather disappointing. Not only did good spending stagnate over the month but, as prices rose, this translated into a 0.4% decline in sales volumes, NBC ecnomists report.
New
2025.01.24 00:37USD/JPY declines on soft US jobs data, eyes on Trump
The USD/JPY slides during the North American session after hitting a six-day high of 156.75, as labor market data revealed in the United States (US) came worse than expected.
New
2025.01.24 00:27CTA selling activity to weigh on Copper and Aluminum - TDS
CTA selling activity in Copper and Aluminum is likely to weigh on these metals, reflecting the downside asymmetry in algo flows resulting from range-bound price action, TDS' Senior Commodity Strategist Daniel Ghali notes.
New
2025.01.24 00:26Silver Price Forecast: XAG/USD plummets to near $30 amid delay in Trump's tariff hike plans
Silver price (XAG/USD) dives an almost 1.75% to near $30.00 in North American trading hours on Thursday.
New
2025.01.23 23:32AUD/USD oscillates below 0.6300 as investors await more clarity on Trump's tariff policy
The AUD/USD pair trades in a narrow range below the immediate resistance of 0.6300 in Thursday's North American session.
New
2025.01.23 22:45ECB Preview: Confidence vs uncertainty - Deutsche Bank
ECB to continue to cut on 30 January with another 25bp reduction in the policy rate to 2.75%, and markets expect the description of the policy stance to be unchanged vs December, Deutsche Bank's analysts report.
New
2025.01.23 22:44GBP/USD: CBI manufacturing survey soft in January - Scotiabank
The CBI's January survey of manufacturing was generally morose, Scotiabank's Chief FX Strategist Shaun Osborne notes.
New
2025.01.23 22:39Disclaimer:
All information and content provided on this website is provided for informational purposes only and is not intended to solicit any investment. Although all efforts are made in order to ensure that the information is correct, no guarantee is provided for the accuracy of any content on this website. Any decision made shall be the responsibility of the investor and Myforex does not take any responsibility whatsoever regarding the use of any information provided herein.
The content provided on this website belongs to Myforex and, where stated, the relevant licensors. All rights are reserved by Myforex and the relevant licensors, and no content of this website, whether in full or in part, shall be copied or displayed elsewhere without the explicit written permission of the relevant copyright holder. If you wish to use any part of the content provided on this website, please ensure that you contact Myforex.
Myforex uses cookies to improve the convenience and functionality of this website. This website may include cookies not only by us but also by third parties (advertisers, log analysts, etc.) for the purpose of tracking the activities of users. Cookie policy
