Select Language

AUD/USD extends the range play around 0.6300 ahead of US PCE Price Index

Breaking news

AUD/USD extends the range play around 0.6300 ahead of US PCE Price Index

  • X
  • facebook
  • LINE
  • RSS

  • X
  • facebook
  • LINE
  • RSS
New update 2025.03.28 17:39
AUD/USD extends the range play around 0.6300 ahead of US PCE Price Index

update 2025.03.28 17:39

  • AUD/USD continues with its struggle to gain any meaningful traction on Friday. 
  • A modest USD uptick and a weaker risk tone act as a headwind for the Aussie. 
  • Hopes for more stimulus from China lend support ahead of the US PCE data.

The AUD/USD pair extends its sideways consolidative price move for the fourth straight day on Friday and remains confined in a range around the 0.6300 mark through the first half of the European session. 

The global risk sentiment took a hit in reaction to US President Donald Trump's new tariffs on imported cars and light trucks, announced on Wednesday. Adding to this, Trump's impending reciprocal tariff announcement next week and their impact on the global economy further weigh on investors' sentiment. This, in turn, is seen acting as a headwind for the risk-sensitive Australian Dollar (AUD), which, along with a modest US Dollar (USD) uptick, exerts some pressure on the AUD/USD pair. 

The intraday USD uptick, however, lacks bullish conviction in the wake of the growing acceptance that the Federal Reserve (Fed) will resume its rate-cutting cycle soon. In fact, the markets are now pricing in over a 65% chance that the US central bank would lower borrowing costs by at least 25 basis points in June amid worries about the potential economic fallout from Trump's aggressive trade policies. This might hold back the USD bulls from placing aggressive bets and support the AUD/USD pair. 

Apart from this, hopes for more stimulus from China help limit losses for the Aussie. Traders also seem reluctant to place aggressive directional bets and opt to wait for the release of the US Personal Consumption Expenditure (PCE) Price Index, due later during the North American session. The crucial US inflation data would influence expectations about the Fed's future policy path, which, in turn, will play a key role in driving the USD demand and provide a fresh impetus to the AUD/USD pair. 

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.

 


Date

Created

 : 2025.03.28

Update

Last updated

 : 2025.03.28

Related articles


Show more

FXStreet

Financial media

arrow
FXStreet

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

GBP/USD retreats from YTD high past 1.34 on Fed turmoil

The Pound Sterling reverses its course after reaching a daily high of 1.3423 due to concerns over the Federal Reserve (Fed) independence, spurred by US President Donald Trump's harsh comments against Fed Chair Jerome Powell. At the time of writing, the GBP/USD is trading at 1.3383, up 0.17%.
New
update2025.04.22 23:48

USD/CAD flattens around 1.3850 as US Dollar looks for firm-footing

The USD/CAD pair trades flat around 1.3850 during North American trading hours on Tuesday. The Loonie pair turns sideways after posting a fresh six-month low near 1.3800 as the US Dollar (USD) looks for a cushion after having a downside run in the last two weeks.
New
update2025.04.22 23:42

Lagarde speech: Either we cut or pause but we will be data dependent to extreme

In an interview with CNBC on Tuesday, European Central Bank (ECB) President Christine Lagarde said that they must be flexible and prepared to take action, per Reuters.
New
update2025.04.22 23:20

USD/JPY Price Forecast: At make or a break around 140.00

The USD/JPY pair recovers some of its intraday losses but is still trading down near 140.65 during North American trading hours on Tuesday. The asset has demonstrated a sharp downside move in the last two weeks and revisited the 21-month low near 139.60.
New
update2025.04.22 22:55

EUR consolidates rally from February lows - Scotiabank

The Euro (EUR) is softer, down 0.2% against the US Dollar (USD) and underperforming most of the G10 currencies along with Swiss Franc (CHF) and Australian Dollar (AUD), Scotiabank's Chief FX Strategist Shaun Osborne notes.
New
update2025.04.22 22:31

GBP/USD consolidates 10-day rally - Scotiabank

Pound Sterling (GBP) is entering Tuesday's American session flat against the US Dollar (USD) and showing signs of exhaustion following an astounding 10-session rally that culminated in Monday's surge through 1.34, Scotiabank's Chief FX Strategist Shaun Osborne notes.
New
update2025.04.22 22:30

IFM cuts global growth forecast for 2025 to 2.8% from 3.3%

The International Monetary Fund (IMF) announced in its updated World Economic Outlook report on Tuesday that it cut the global growth projections to 2.8% in 2025 and to 3% in 2026 from 3.3% for both years in the previous forecast, citing century-high US tariffs.
New
update2025.04.22 22:23

JPY outperforming G10 currencies - Scotiabank

The Japanese Yen (JPY) is up 0.4% against the US Dollar (USD) and outperforming most of the G10 currencies, Scotiabank's Chief FX Strategist Shaun Osborne notes.
New
update2025.04.22 22:11

USD/CAD dips below 1.38 remain well-supported - Scotiabank

The Canadian Dollar (CAD) is little changed on the session so far, reflecting a somewhat mixed trend in the USD overall, Scotiabank's Chief FX Strategist Shaun Osborne notes.
New
update2025.04.22 21:59

USD steadies, undertone remains weak - Scotiabank

The US Dollar (USD) is consolidating. The major currencies are trading mixed overall as markets steady and take stock of developments after yesterday's steep US equity declines.
New
update2025.04.22 21:54

Disclaimer:arw

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.

  • Facebook
  • Twitter
  • LINE

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

I agree
share
Share
Cancel