- AUD/USD is trading in negative lands near 0.6280 in the early Asian session on Thursday.
- China will face a 54 % tariff under the new Trump policy, which weighs Australian.
- The Caixin Service Manager Service Index in China rose to 51.9 in March, stronger than expected.
The AUD/USD pair under the pressure pressure remains about 0.6280 during the early Asian session on Thursday. Australian dollar losses against Greenback after the strongest Chinese economic data. However, the upward trend may be limited as US President Donald Trump announced that the mutual global customs duties are sweeping, prompting merchants to endure.
The Trump administration announced on Wednesday that the United States will impose a 10 % basic tariff on all imports to the United States (USD) and slap additional duties on about 60 countries with the largest commercial imbalances with the United States. China was severely injured, facing a tariff of at least 54 % on many goods. The Policy Declaration prompted merchants to enter into a risk position and exercise some pressure on Australian because China is a major trading partner in Australia.
On Thursday, the Chinese economy can help reduce AUD losses. China (PMI) was improved to 51.9 in March from 51.4 in February. This number came stronger than expected 51.6.
The data issued by the Australian Bureau of Statistics on Thursday showed that the country’s trade surplus decreased to 2968 million in February compared to 5600 meters expected and 5,156 million (reviewed from 5620 meters) in January. Meanwhile, Australia’s exports decreased by 3.6 % of my mom in February from 0.8 % (reviewed from 1.3 %) seen a month ago. Imports increased by 1.6 % of my mother in February, compared to a decrease of 4.0 % (reviewed from -0.3 %) in January.
On the other hand, concerns about the economic slowdown in the United States may undermine the dollar in the short term. Traders will monitor unemployed demands in the United States, the final global S&P service managers, and ISM service managers. If reports show weaker results, this may lead to withdrawing the lower dollar and creating the back winds of the Aud/USD.
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.
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