- The Australian Dollar wins after China’s TD MI inflation display and PMI data released on Monday.
- China’s PMI Caixin production rose to 50.8 compared to 50.1 in February.
- The US dollar fights with expectations as US PCE inflation data and promotes concerns about an unexpected peak in the US inflation.
The Australian Dollar (AUD) rebounded on Monday, ending a six-day losing streak as the US Dollar (USD) weakened following the release of January’s Personal Consumption Expenditures (PCE) inflation data on Friday. The report met market expectations, alleviating concerns about unexpected inflationary pressures in the US.
Australia’s TD-MI Inflation Gauge declined by 0.2% month-over-month in February, reversing January’s 0.1% increase. This marked its first drop since August and followed the Reserve Bank of Australia’s (RBA) decision to lower its cash rate by 25 basis points to 4.1% in its first monetary policy meeting of the year, signaling a continued moderation in inflation. On an annual basis, the gauge rose by 2.2%, slightly below the previous 2.3% increase.
The Australian Dollar also found support from positive economic data out of China. The Caixin Manufacturing Purchasing Managers’ Index (PMI) increased to 50.8 in February, up from 50.1 in January and surpassing expectations of 50.3. Given China’s status as a key trade partner for Australia, the stronger PMI figures provided a boost to the AUD.
However, the currency’s gains may be capped by rising US-China trade tensions. Over the weekend, US President Donald Trump announced an additional 10% tariff on Chinese imports, set to take effect on Tuesday, adding to the previous 10% tariff imposed last month. Additionally, Trump stated on Truth Social that a 25% tariff on Canadian and Mexican goods will be implemented on March 4.
Australian Dollar Strengthens as Fears of Unexpected US Inflation Subside
- The US Dollar Index (DXY), which pursues the US dollar compared to the six major currencies, is weakened at the time of writing at 107.30am, after three consecutive profits. If US Treasury ministries improve, the disadvantages of greenbacks could be limited. Financial revenues for the two and ten years were currently 4.02% and 4.24%.
- The US PCE inflation report met expectations, with monthly headline PCE stable at 0.3%. Kernpce rose slightly to 0.3% compared to 0.2% in December, but the annual headline PCE was 2.6%, slightly exceeding the forecast, but not changed compared to the December image. Core PCE returned to 2.6%, 2.9% in December.
- Tensions escalated between US President Donald Trump and Ukrainian leader Volodymyr Zelenskyy during peace deal negotiations. Zelenskyy was expected to sign an agreement granting the US greater access to Ukraine’s rare earth minerals and participate in a joint press conference, but the plan was abandoned after a heated exchange between the leaders in front of the media. Following the confrontation, in which Trump openly expressed his disdain, top advisers asked Zelenskyy to leave the White House.
- President Trump signed a memorandum on Friday instructing the Committee on Foreign Investment in the United States (CFIUS) to limit Chinese investments in strategic sectors. Reuters cited a White House official saying that the national security memorandum seeks to encourage foreign investment while safeguarding US national security interests from potential threats posed by foreign adversaries like China.
- The S&P Global Australia Manufacturing Purchasing Managers Index (PMI) was revised down to 50.4 in February from an initial estimate of 50.6 but remained above January’s 50.2. This marked the second consecutive month of improvement in manufacturing conditions and the strongest growth since February 2023.
- China’s NBS production PMI has improved to 50.2 compared to 49.1 in February. This number was stronger than the expected 49.9. In the meantime, the NBS-PMI NBS rose to 50.4 in February of January, exceeding its 50.3 estimate.
- An increase in trade war risk has become extremely important, according to a Wall Street Journal report on the outlook for the Australian Bank of Australia (CBA) of Australian Dollar. China’s response to these trade threats is a key factor shaping the future performance of AUD.
Australian Dollar Struggles at 0.6200 Support Amid Sustained Bearish Pressure
The AUD/USD pair is hovering around 0.6220 as trading begins on Monday. Technical indicators on the daily chart show persistent bearish pressure, with the pair remaining below the nine-day and 14-day Exponential Moving Averages (EMAs). This signals a weakening short-term trend, further confirmed by the 14-day Relative Strength Index (RSI), which remains under the 50 mark.
On the downside, the pair is testing a key psychological support level at 0.6200. A sustained break below this threshold could trigger a further decline toward 0.6087, the lowest level recorded since April 2020, which was reached on February 3.
Immediate resistance is found at 0.6280, marked by the nine-day EMA, followed by the 14-day EMA at 0.6290. If the pair manages to break above these levels, it could gain upward momentum and retest the three-month high of 0.6408, last seen on February 21.
AUD/USD: Daily Market Analysis
Australian Dollar Exchange Rate & Price Today
The table below presents the percentage change of the Australian Dollar (AUD) against major global currencies today. Among them, the AUD showed the highest strength against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.44% | -0.27% | -0.15% | -0.10% | -0.35% | -0.21% | -0.12% | |
| EUR | 0.44% | 0.06% | 0.06% | 0.15% | -0.01% | 0.04% | 0.14% | |
| GBP | 0.27% | -0.06% | 0.13% | 0.09% | -0.07% | -0.02% | 0.08% | |
| JPY | 0.15% | -0.06% | -0.13% | 0.26% | -0.15% | -0.02% | 0.03% | |
| CAD | 0.10% | -0.15% | -0.09% | -0.26% | -0.09% | -0.11% | -0.01% | |
| AUD | 0.35% | 0.01% | 0.07% | 0.15% | 0.09% | 0.05% | 0.15% | |
| NZD | 0.21% | -0.04% | 0.02% | 0.02% | 0.11% | -0.05% | 0.10% | |
| CHF | 0.12% | -0.14% | -0.08% | -0.03% | 0.00% | -0.15% | -0.10% |
