- The Australian Dollar depreciates as the US Dollar is trading more than 0.50% higher on Thursday.
- Australia’s Private Capital Expenditure declined by 0.1% in Q1, against the expected increase of 0.5%.
- A US federal court has blocked President Trump’s proposed “Liberation Day” tariffs from taking effect.
The Australian Dollar (AUD) remains subdued for the fourth successive session on Thursday, following disappointing Private Capital Expenditure data for the first quarter. The AUD/USD pair extends its losses as the US Dollar (USD) is trading higher after a US federal court blocked US President Donald Trump’s “Liberation Day” tariffs from taking effect. A Reuters report showed that a federal trade court ruled Trump didn’t have the authority to impose sweeping tariffs on imports from countries that sell more to the US.
The Trump administration has halted some sales of jet engines, semiconductors, and certain chemicals to China. The New York Times cited two familiar sources saying that this action is a response to China’s recent export restrictions on exports of critical minerals to the US. Any change in Chinese markets could impact the Australian Dollar as Australia and China are close trade partners.
The AUD could face challenges as the Reserve Bank of Australia (RBA) is expected to deliver more rate cuts in the upcoming policy meetings. The central bank acknowledged progress in curbing inflation and warned that US-China trade barriers pose downside risks to economic growth. Governor Michele Bullock stated that the RBA is prepared to take additional action if the economic outlook deteriorates sharply, raising the prospect of future rate cuts.
Australian Dollar declines as US Dollar continues to advance ahead of Q1 GDP data release
- The US Dollar Index (DXY), which measures the value of the Greenback against six major currencies, is trading more than 0.50% higher at 100.40 at the time of writing. Traders likely await the preliminary US Q1 Gross Domestic Product (GDP) data, Personal Consumption Expenditures Prices QoQ, and Initial Jobless Claims, scheduled to be released on Thursday.
- Federal Open Market Committee’s (FOMC) Minutes for the latest policy meeting, released on Wednesday, indicated that Federal Reserve (Fed) officials broadly agreed that heightened economic uncertainty justified their patient approach to interest-rate adjustments. Fed officials emphasized the need to keep interest rates unchanged for some time, as recent policy shifts cloud the US economic outlook.
- The US fiscal deficit could increase further when Trump’s “One Big Beautiful Bill” goes through the Senate floor, increasing the risk of bond yields staying higher for longer. Higher bond yields can keep borrowing costs higher for consumers, businesses, and governments. Trump’s bill is expected to increase the deficit by $3.8 billion, as it would deliver tax breaks on tip income and US-manufactured car loans, according to the Congressional Budget Office (CBO).
- US Senator Ron Johnson told CNN on Sunday that “I think we have enough votes to stop the process until the president gets serious about spending reduction and reducing the deficit.” Johnson added, “My primary focus now is spending. This is completely unacceptable. Current projections are a $2.2 trillion per year deficit.”
- Moody’s downgraded the US credit rating from Aaa to Aa1, following similar downgrades by Fitch Ratings in 2023 and Standard & Poor’s in 2011. Moody’s now projects US federal debt to climb to around 134% of GDP by 2035, up from 98% in 2023, with the budget deficit expected to widen to nearly 9% of GDP. This deterioration is attributed to rising debt-servicing costs, expanding entitlement programs, and falling tax revenues.
- The US Dollar faced challenges due to improved risk-on sentiment following the alleviation of trade tensions between the United States and the European Union (EU). President Trump extended the tariff deadline on imports from the EU from June 1 to July 9.
- China Industrial Profits rose 3% year-over-year in April, following a previous growth of 2.6%. Additionally, the profits increased 1.4% YoY in the first four months of 2025, advancing from 0.8% growth in the January–March period. The Global Times, a Chinese state media outlet, reported that positive developments contributed to a rise in industrial profits in April.
- The Australian Bureau of Statistics reported that monthly inflation, in the price of a fixed basket of goods and services acquired by household consumers, steadied at 2.4% year-over-year in April, surpassing the expected 2.3% increase.
Australian Dollar falls below ascending channel toward 0.6400, 50-day EMA
The AUD/USD pair is trading around 0.6410 on Thursday, with a weakening bullish bias. The technical analysis of the daily chart indicates that the pair has broken below the ascending channel’s lower boundary. The short-term price momentum also weakens as the pair remains below the nine-day Exponential Moving Average (EMA). The 14-day Relative Strength Index (RSI) holds at 50 mark, suggesting neutral bias is in play.
The AUD/USD pair could attempt to regain ground to stay within the ascending channel and test the immediate barrier at the nine-day EMA of 0.6437, followed by a six-month high at 0.6537, which was recorded on May 26. A breach above this level could reinforce the bullish bias and support the pair to approach the upper boundary of the ascending channel around 0.6640.
On the downside, the 50-day EMA at 0.6382 appears as the initial support. A break below this level could weaken the medium-term price momentum and put downward pressure on the pair to navigate the region around 0.5914, the lowest since March 2020.
AUD/USD: Daily Chart
Australian Dollar PRICE Today
The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the weakest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.40% | 0.25% | 0.69% | 0.11% | 0.23% | 0.58% | 0.70% | |
| EUR | -0.40% | -0.14% | 0.30% | -0.28% | -0.11% | 0.17% | 0.29% | |
| GBP | -0.25% | 0.14% | 0.43% | -0.13% | 0.04% | 0.30% | 0.34% | |
| JPY | -0.69% | -0.30% | -0.43% | -0.56% | -0.47% | -0.15% | -0.09% | |
| CAD | -0.11% | 0.28% | 0.13% | 0.56% | 0.06% | 0.47% | 0.47% | |
| AUD | -0.23% | 0.11% | -0.04% | 0.47% | -0.06% | 0.29% | 0.30% | |
| NZD | -0.58% | -0.17% | -0.30% | 0.15% | -0.47% | -0.29% | 0.00% | |
| CHF | -0.70% | -0.29% | -0.34% | 0.09% | -0.47% | -0.30% | -0.01% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).
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.
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