The Australian Dollar (AUD) is demonstrating resilience amidst market pressures, recording consistent growth for two straight days. Despite fluctuating US Dollar values and Australian employment numbers, the AUD remains stable, primarily boosted by the growing ASX 200 Index and strong metal prices.
Recent data from Westpac indicates a downturn in Australia’s Employment Change, which recorded a drop of -6.6K. Furthermore, March witnessed an increase in the Unemployment Rate by 3.8%. Holding off on raising interest rates, the Reserve Bank of Australia (RBA) stated the importance of confidence in inflation trends before considering potential rate adjustments.
In global commerce, US President Joe Biden directed US Trade Representative Katherine Tai to examine the viability of tripling China’s steel and aluminum tariffs from 7.5% to a significant 22.5%. This move could significantly alter worldwide metal prices, influencing sectors ranging from construction to consumer goods.
Resilience of Australian dollar amidst market pressures
The consequences of this initiative are currently under review by Representative Tai.
Commenting on US monetary policy, Loretta Mester, President of the Federal Reserve Bank of Cleveland, and Fed Governor Michelle Bowman acknowledge current inflation rates surpassing predictions. Both officials urge the Federal Reserve to stay alert and adaptable, highlighting the potential impacts of policy changes on sectors like real estate and consumer goods, including changes to borrowing costs, spending power, and investment returns.
Investors await the release of weekly Initial Jobless Claims and Existing Home Sales reports for insights into the US economy’s health. Central bank’s statements, stock market performance, political developments, and financial news headlines significantly shape investment decisions. However, investors must remember to conduct their due diligence as investing always carries inherent risks.
Technical Analysis suggests a bearish trend for the AUD/USD pair, currently trading at around 0.6440. Notably, the Moving Average Convergence Divergence (MACD) indicator hints at a downward trend for the pair, whereas the Relative Strength Index (RSI) suggests a potential bounce could be imminent. Traders are advised to stay vigilant, as macroeconomic changes and unexpected news can cause unpredicted fluctuations.
