Australian Dollar Rallies After Trump’s Trade Optimism, Judo Bank PMI Boost
The Australian dollar (AUD) recovered on Wednesday, recouping losses from the previous session, as President Donald Trump’s positive trade comments and upbeat domestic data boosted investor sentiment.
AUD/USD stabilized after the publication of preliminary data from the purchasing manager index (PMI) of Judo Bank Australia, which showed that activity in the private sector grew for the seventh consecutive month. This expansion was supported by continued growth in both the manufacturing and services sectors.
PMI Data: A Mixed Bag
While the Judo Bank Manufacturing PMI slipped to a two-month low of 51.7 in April, compared to 52.1 in March, it remained in the expansionary territory. The production performance stayed strong, but new orders growth was modest. Meanwhile, the Services PMI dipped slightly to 51.4, from 51.6 in March. The composite PMI also eased to 51.4, down from 51.6.
Trump’s Trade Remarks Boost Market Mood
The mood was lifted further as US President Donald Trump assured investors that he had no intention of removing Federal Reserve (Fed) Chairman Jerome Powell, alleviating concerns about the central bank’s independence. This came after US Treasury Secretary Steven Mnuchin described the ongoing trade confrontation with China as “not sustainable,” hinting at possible talks to de-escalate tensions.
Trump Optimistic About Trade Negotiations
Key takeaways:
- Trump expressed optimism about ongoing trade negotiations with China.
- He stated that tariffs on Chinese goods would not be as high as 145% but would not be completely lifted.
- The White House announced progress in negotiations for trade agreements to reduce tariffs on initial US imports this month, with 18 countries already submitting proposals.
- Federal Reserve Vice Chairwoman Lael Brainard emphasized that surprise tariffs could drive up prices and inflation.
- US Consumer Price Index (CPI) rose 2.4% annually in March, while core CPI increased by 2.8%.
- The Reserve Bank of Australia (RBA) minutes pointed to persistent uncertainties surrounding the next interest rate hike, with no decisions made in advance.
- China’s gross domestic product (GDP) growth slowed to 5.4% in the first quarter, from 6.4% in the previous quarter.
AUD/USD Hovers Around 0.6400, Supported by Nine-day EMA
The AUD/USD pair hovers near 0.6390 on Wednesday, with technical indicators signaling a bullish trend. The couple remains above the nine-day exponentially moving average (EMA), while the 14-day relative strength index (RSI) remains firmly above the 50 mark, indicating persistent upward momentum.
On the upside, the immediate resistance lies at the recent four-month high of 0.6439, reached on April 22. A clear break above this level could open the door for a rally towards the five-month high of 0.6515. On the downside, the first support is seen at the nine-day EMA near 0.6350, followed by stronger support at the 50-day EMA at 0.6295.
Pro Tip:
Keep an eye on US-China trade developments and Australian economic data releases for further direction in AUD/USD pairs.
Australian Dollar Today’s Exchange Rates
The following table displays the percentage change of the Australian dollar compared to the major currencies today, with the Australian dollar being the strongest compared to the Swiss franc.
The heatmap shows the percentage development of the major currencies compared to each other. The base currency is selected from the left column, while the target currency is selected from the upper line. For example, if you select the Australian dollar from the left column and move horizontally to the US dollar, the percentage change in the box will be displayed as AUD/USD.
Australian Dollar FAQs
Final Thoughts: The Australian dollar benefited from risk-on sentiment fueled by Trump’s positive trade remarks and upbeat Australian economic data. Traders will likely keep a close eye on US-China trade developments and Australian data releases for further cues on AUD/USD movements.