- The Australian Dollar remains weak as Trump’s tariff threats create obstacles for risk-sensitive currencies.
- The AUD faces challenges as Beijing retaliates against Trump’s trade sanctions by initiating an investigation into US-based Nvidia
- The US Dollar strengthened after a higher-than-expected US PPI report was released on Thursday
The Australian Dollar (AUD) continues to face challenges against the US Dollar (USD) as of Friday. Tariff threats from the Trump administration have strengthened the USD broadly, creating resistance for the AUD/USD pair. Speculation about a possible 10% tariff on Chinese goods could further weigh on the AUD, given that China is Australia’s largest trading partner.
On Thursday, the AUD found some support following the release of mixed domestic employment data. Seasonally adjusted Employment Change showed an increase of 35,600, raising the total number of employed individuals to 14,535,500 in November. Additionally, the Unemployment Rate fell to 3.9%, the lowest since March, beating market expectations of 4.2%.
Meanwhile, the US Dollar gained momentum after the release of a stronger-than-expected US Producer Price Index (PPI) report on Thursday. The PPI rose by 0.4% month-over-month in November, marking the largest increase since June, following a 0.3% rise in October, which was revised upward. This result exceeded the anticipated 0.2% growth.
Looking ahead, the US Federal Reserve’s interest rate decision is set to be a key event next week. Traders are now fully anticipating a 25 basis point rate cut on December 18, according to the CME FedWatch Tool.
Australian Dollar faces pressure from tariff threats imposed by Trump’s administration
- Beijing has already begun retaliation against Trump trade sanctions, launching a probe into Nvidia, threatening to blacklist a US apparel company, blocking the export of critical minerals to the United States, and tightening the supply chain for drones.
- US Consumer Price Index (CPI) rose to 2.7% year-over-year in November from 2.6% in October. The headline CPI reported a 0.3% reading MoM, in line with the market consensus. Meanwhile, the core CPI, excluding volatile food and energy prices, climbed 3.3% YoY, while the core CPI increased 0.3% MoM in November, as expected.
- The Australian Dollar received downward pressure on Wednesday as China, a key trading partner of Australia, saw its top leaders and policymakers consider letting the Chinese Yuan fall in response to an expected sharp hike in US tariffs, per Reuters.
- China President Xi Jinping stated on Tuesday, “China has full confidence in achieving this year’s economic target.” Xi emphasized that China will continue to serve as the largest engine of global economic growth and asserted that there would be no winners in tariff wars, trade wars, or tech wars.
- China’s Trade Balance (CNY) increased to CNY 692.8 billion in November, up from CNY 679.1 billion in the previous month. Exports grew by 1.5% year-over-year in November, compared to the 11.2% rise in October. Meanwhile, imports increased by 1.2% YoY, recovering from the 3.7% decline recorded earlier.
- The RBA kept the Official Cash Rate (OCR) unchanged at 4.35% in its final policy meeting in December. RBA Governor Michele Bullock highlighted that while upside inflation risks have eased, they persist and require ongoing vigilance. The RBA will closely monitor all economic data, including employment figures, to guide future policy decisions.
- Australia’s economy grew at its slowest annual pace since the pandemic in the third quarter. The OZ nation’s Gross Domestic Product (GDP) rose 0.3% in the September quarter, missing market forecasts of 0.4%. Weaker-than-expected GDP growth made markets almost fully price in a rate cut next April at 96% (from 73% before), according to Refinitive interest rate probabilities data.
Technical Analysis: Australian Dollar holds steady above 0.6350, just above its yearly lows
The AUD/USD pair is trading near 0.6360 as of Friday. A review of the daily chart indicates a growing bearish trend, with the pair moving lower within a descending channel pattern. The 14-day Relative Strength Index (RSI) remains slightly above 30, signaling ongoing bearish momentum.
The yearly low of 0.6348, last touched on August 5, acts as immediate support. A break below this level could amplify the bearish outlook, potentially pushing the pair toward the channel’s lower boundary around 0.6190.
On the upside, the AUD/USD pair may encounter initial resistance near the nine-day Exponential Moving Average (EMA) at 0.6404. Further resistance lies around the 14-day EMA at 0.6427, coinciding with the upper boundary of the descending channel. A clear break above this channel could propel the pair toward the seven-week high of 0.6687.
AUD/USD: Daily Chart
Australian Dollar Price Today
The table below displays the percentage change of the Australian Dollar (AUD) against major listed currencies. The AUD showed the most weakness against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.05% | 0.07% | 0.20% | 0.08% | 0.08% | 0.06% | 0.06% | |
| EUR | -0.05% | 0.02% | 0.18% | 0.03% | 0.03% | 0.01% | 0.00% | |
| GBP | -0.07% | -0.02% | 0.15% | 0.02% | 0.00% | -0.01% | -0.02% | |
| JPY | -0.20% | -0.18% | -0.15% | -0.11% | -0.12% | -0.15% | -0.15% | |
| CAD | -0.08% | -0.03% | -0.02% | 0.11% | -0.01% | -0.02% | -0.03% | |
| AUD | -0.08% | -0.03% | -0.01% | 0.12% | 0.01% | -0.02% | -0.03% | |
| NZD | -0.06% | -0.01% | 0.00% | 0.15% | 0.02% | 0.02% | -0.02% | |
| CHF | -0.06% | -0.01% | 0.02% | 0.15% | 0.03% | 0.03% | 0.02% |
