Australian Dollar continues its decline as US Dollar remains strong amid risk-off mood

• Traders remain wary of potential US tariffs on Canada, Mexico, and the European Union, fueling global uncertainty.
• PCE and GDP data from the US came in strong.
• Reserve Bank of Australia Deputy Governor Andrew Hauser emphasized the need for stronger inflation evidence before further policy moves.
• China's PBC Deputy Governor Lu Lei proposed special treasury bonds to bolster major state-owned banks, underscoring potential effects on Australia's resource exports.

The Australian Dollar (AUD) loses ground against the US Dollar (USD) for the fifth consecutive day on Thursday. A prevailing risk-off mood, combined with renewed United States (US) tariff threats, underpins the Greenback's strength alongside strong inflation and GDP data. Meanwhile, the Reserve Bank of Australia (RBA) maintains a cautious stance as it grapples with lingering inflation challenges.

Daily digest market movers: AUD pressured by tariff concerns and subdued capital spending

• The Aussie extends its losing streak, further weighed by softer-than-expected Private Capital Expenditure data, which declined 0.2% in Q4 2024 instead of the forecasted 0.8% gain.
• RBA Deputy Governor Andrew Hauser reiterated optimism for eventual inflation improvements but insisted on seeing tangible progress before altering the bank's trajectory.
• On the Chinese front, the People's Bank of China Deputy Governor Lu Lei signaled support for new treasury bonds to boost key banks' equity levels. This development may impact Australian commodity exports if Chinese growth slows.
• US trade authorities published contradictory statements on scheduled tariffs against multiple trading partners, including Canada and Mexico, leading to persistent uncertainty in financial markets.
• Recent US data showed second-estimate GDP growth at 2.3% annualized in Q4, while the core Personal Consumption Expenditures measure climbed to 2.7%, reinforcing the Federal Reserve's hawkish lean on inflation.

AUD/USD technical outlook: Five-day losing streak confirms break below 20-day SMA

AUD/USD has lost ground for a fifth consecutive session, declining around the mid-0.6200 zone after failing to hold above its 20-day Simple Moving Average. The Relative Strength Index (RSI) hovers in a lower range, declining sharply and signaling weakening bullish efforts. Meanwhile, the Moving Average Convergence Divergence (MACD) histogram prints decreasing green bars, suggesting that upside momentum is fading. The pair's failure to maintain traction above the 20-day SMA does not necessarily imply a full-blown bearish trend shift. However, further downside cannot be ruled out if tariff news or domestic data significantly dent risk sentiment.