- AUD/USD weakens with the US dollar to strengthen safe demand amid aversion to the increasing risks that US tariff concerns are driven.
- Federal Reserve Chairman Jerome Powell admitted the difficulty of assessing the broader inflationary effect of definitions.
- The Australian dollar faces pressure where trading re -evaluating RBA’s monetary policy forecasts after disappointing job data.
AUD/USD is still under pressure for a second consecutive day, hovering about 0.6300 during Asian trading on Friday. The couple is struggling with the strengthening of the US dollar (USD), with the support of safe -term demand amid increasing aversion to the risks associated with the US tariff policies. Meanwhile, US bond returns are decreased as investors flow to treasury bonds in response to economics and geopolitical doubts.
Jerome Powell’s head of the Federal Reserve (Fed) reduced the inflationary effect of definitions, and he temporarily described him, but he recognized the challenges in assessing the wider effects. While the recession risk increased, Powell suggested that she remains relatively low at the present time.
On the front of the data, the unemployed demands increased to the initial work to 223 thousand for the week ending on March 15, which are slightly missing estimates from 224 thousand and exceeding the revised number in the previous week of 221 thousand (from 220 thousand). In addition, the Philadelphia manufacturing survey in March fell to 12.5 illiterate, a decrease on February 18. This represents the second monthly decrease in a row, although the decline was less severe than expected 8.5.
The Australian dollar (AUD) also faces the opposite winds, as merchants re -evaluate the monetary policy position at the RBA after data on the most expected jobs. The unemployment rate in Australia remained fixed at 4.1 % in February, but an unexpected decrease in employment raised concerns about the weak labor market.
The disappointing job report has created speculation that the sustainable labor market can provide RBA more flexibility to reduce interest rates. However, Australian Reserve Governor Sarah Hunter noticed earlier this week that although the Board of Directors acknowledged the area to reduce the restriction of policy – with the last decision to mitigate – is still more careful than markets about additional price cuts.
Questions and answers in Australian dollars
One of the most important factors for the Australian dollar (AUD) is the level of interest rates set by the Australian Reserve Bank (RBA). Since Australia is a resource -rich country, the other main engine is the largest export price, iron ore. The health of the Chinese economy, the largest commercial partner, is a factor, as well as inflation in Australia, the rate of growth and commercial balance. Market morale-whether investors are eating more risky assets (risk) or searching for safe materials (risk)-is also a worker, with positive risks for AUD.
The Australian Reserve Bank (RBA) affects the Australian dollar (AUD) by determining the level of interest rates that Australian banks can persuade each other. This affects the level of interest rates in the economy as a whole. The main goal of RBA is to maintain a stable inflation rate of 2-3 % by setting interest rates up or down. Relatively high interest rates are supported compared to other main central banks, and relatively low vice versa. RBA can also use and tighten quantitative dilution to influence credit conditions, with previous AUD negative and positive to AUD.
China is the largest commercial partner in Australia, so the health of the Chinese economy is a major impact on the value of the Australian dollar (AUD). When the Chinese economy does a good job, it buys more raw materials, commodities and services from Australia, raising the demand for AUD, and raising its value. The opposite is the case when the Chinese economy does not grow at the speed available. Positive or negative surprises in Chinese growth data, therefore, they often have a direct impact on the Australian dollar and its wives.
Iron Ore is the largest export in Australia, as it represents 118 billion dollars annually according to data from 2021, with China as its main destination. Therefore, the price of iron ore can be an engine for the Australian dollar. In general, if the price of iron ore rises, the AUD also rises, as the total demand for the currency increases. The opposite is the case if the price of iron ore decreases. Iron ore prices also tend to increase the possibility of a positive commercial balance for Australia, which is also positive for AUD.
The commercial balance, which is the difference between what a country gains from its exports in exchange for what it pays to its imports is another factor that can affect the value of the Australian dollar. If Australia produces very required after exports, its currency will obtain a value of the excess demand created from foreign buyers who seek to buy its exports in exchange for what it spends to buy imports. Therefore, the positive net trade balance enhances AUD, with the opposite effect if the trade balance is negative.
adxpro.online