- The Australian Dollar rises as Australia prepares to resume trade talks with the European Union.
- China’s Consumer Price Index (CPI) fell by 0.1% year-over-year in March, following a 0.7% decline in February.
- President Trump declared a 90-day delay on the implementation of new tariffs for most of the United States’ trade partners, lowering them to 10%.
The Australian Dollar (AUD) strengthened against the US Dollar (USD) on Thursday following reports that Australia and the European Union (EU) are preparing to resume trade negotiations. The EU announced it would revisit the stalled talks, with EU Trade Commissioner Maros Sefcovic proposing a new timeline for discussions with Australia’s Trade Minister Don Farrell. These talks had previously collapsed two years ago due to disagreements over agricultural access to the EU’s large market.
The AUD/USD pair had earlier dropped when US President Donald Trump raised tariffs on Chinese imports to 125%, escalating trade tensions with China. This caused concern due to Australia’s close trade relationship with China.
China responded by increasing tariffs on all US imports to 84% and adding six US companies—such as Shield AI and Sierra Nevada—to its trade blacklist. Additionally, China imposed export restrictions on US companies, including American Photonics and BRINC Drones.
In economic news, China’s Consumer Price Index (CPI) declined by 0.1% year-over-year in March, following a 0.7% drop in February, missing the expected 0.1% increase. Monthly CPI also fell by 0.4%, worse than February’s 0.2% drop. The Producer Price Index (PPI) dropped 2.5% annually in March, more than the expected 2.3% decline.
Australia’s economic outlook remains uncertain, with low business and consumer confidence. This has fueled expectations of a more dovish stance from the Reserve Bank of Australia (RBA), with markets now anticipating up to 100 basis points in rate cuts starting in May, with additional reductions expected in July and August.
Australian Dollar Faces Challenges Ahead of US CPI Release
- The US Dollar Index (DXY), which measures the USD’s performance against a group of six major currencies, is currently trading lower around 102.60. Market focus is now shifting to the upcoming US Consumer Price Index (CPI) inflation report, scheduled for release later on Thursday.
- On Wednesday, President Trump revealed a 90-day delay on new tariffs for most US trade partners, reducing them to 10% to facilitate ongoing talks. Mark Hackett of Nationwide commented, “The 90-day pause signals that negotiations with many countries have been fruitful, and it brings some much-needed stability to a market shaken by uncertainty.”
- The Federal Open Market Committee (FOMC) Meeting Minutes suggested that policymakers nearly unanimously agree that the US economy faces the dual risk of rising inflation and slowing growth, warning of “difficult tradeoffs” ahead for the Federal Reserve.
- Fed officials continue to downplay the immediate impact of escalating trade tensions, maintaining that policy decisions will remain data-driven. Market participants are now pricing in just a 40% chance of a rate cut at next month’s Fed meeting, according to the CME FedWatch tool.
- Adding to the global trade landscape, The Wall Street Journal reported that China held discussions with European Union trade chief Maros Sefcovic, expressing its willingness to deepen trade, investment, and industrial cooperation with the EU.
- In Australia, consumer sentiment weakened notably, with the Westpac Consumer Confidence Index falling 6% in April after a 4% gain in March—the first decline since January.
- Australia’s business sentiment weakened in March, with the NAB Business Confidence Index dropping to -3 from a revised -2, marking its lowest level since November. While business conditions remained mostly stable, they were slightly below average, with a modest improvement from 3 to 4.
Australian Dollar Retreats from Nine-Day EMA Around 0.6150
The AUD/USD pair is trading around 0.6140 on Thursday, with technical indicators on the daily chart indicating a continued bearish outlook. The pair has pulled back from the nine-day Exponential Moving Average (EMA), and the 14-day Relative Strength Index (RSI) is below 50, reinforcing the bearish trend.
Immediate support is located at 0.5914, which marks the lowest level since March 2020, followed by the psychological level at 0.5900.
On the upside, initial resistance is seen at the nine-day EMA near 0.6147, followed by the 50-day EMA at 0.6261. A stronger recovery could push the pair toward the four-month high at 0.6408.
AUD/USD: Daily Chart Analysis
Australian Dollar Exchange Rate Today
The table below highlights the percentage change of the Australian Dollar (AUD) against various major currencies today, with the Australian Dollar showing the most strength against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.32% | -0.07% | -0.84% | -0.06% | -0.46% | -0.84% | -0.51% | |
| EUR | 0.32% | 0.02% | -0.53% | 0.24% | -0.18% | -0.56% | -0.22% | |
| GBP | 0.07% | -0.02% | -0.53% | 0.22% | -0.21% | -0.58% | -0.35% | |
| JPY | 0.84% | 0.53% | 0.53% | 0.75% | 0.35% | -0.08% | 0.43% | |
| CAD | 0.06% | -0.24% | -0.22% | -0.75% | -0.41% | -0.79% | -0.58% | |
| AUD | 0.46% | 0.18% | 0.21% | -0.35% | 0.41% | -0.39% | -0.15% | |
| NZD | 0.84% | 0.56% | 0.58% | 0.08% | 0.79% | 0.39% | 0.24% | |
| CHF | 0.51% | 0.22% | 0.35% | -0.43% | 0.58% | 0.15% | -0.24% |
