- The Australian Dollar faces headwinds as reciprocal tariffs came into effect on Wednesday.
- The AUD remains vulnerable as the US imposed a massive 104% levy on Chinese imports.
- The US Dollar may find support as a higher 10-year Treasury yield reflects stronger investor demand for higher returns.
The Australian Dollar (AUD) halted its three-day losing streak against the US Dollar (USD) on Wednesday, supported by comments from US President Donald Trump suggesting a willingness to negotiate with trade partners. Trump’s remarks boosted optimism for a potential easing of global trade tensions.
The AUD faces headwinds as market volatility remains elevated after the US imposed an expected additional 50% tariff on Chinese imports, particularly as Australia maintains strong economic ties with China. Beijing denounced Trump’s latest threat as “blackmail” and vowed to safeguard its interests.
Australia’s economic outlook remains fragile, with both business and consumer confidence subdued. The soft data has reinforced expectations of a more dovish stance from the Reserve Bank of Australia (RBA), with markets now pricing in up to 100 basis points in rate cuts this year—starting in May, with further reductions likely in July and August.
Australian Dollar struggles to sustain gains amid trade uncertainties
- The US Dollar Index (DXY), which measures the USD against a basket of six major currencies, depreciates below 102.50. However, the downside appears limited as the US 10-year Treasury yield climbed to 4.36% at the time of writing. The rise in yields reflects heightened investor demand for returns amid growing uncertainty fueled by escalating global trade tensions.
- Traders will likely watch this week’s inflation data, which is expected to heavily influence the outlook for interest rate cuts in the coming months. Additionally, investors await the release of the FOMC Meeting Minutes later on Wednesday for further policy clues.
- On Tuesday, US Customs and Border Protection announced readiness to begin collecting country-specific tariffs from 86 trade partners. President Trump stated he was not considering pausing his broad tariff plans despite outreach from several countries seeking exemptions, although he signaled some openness to negotiations.
- Chicago Fed President Austan Goolsbee stressed the importance of thoroughly evaluating economic data before deciding on future monetary policy steps.
- According to the CME FedWatch Tool, traders are increasingly betting on a 25-basis-point rate cut as early as May. Nonetheless, the broader market continues to view a July cut as more likely, with expectations for total rate reductions exceeding 100 basis points by year-end.
- 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 also softened as the NAB Business Confidence Index slipped to -3 in March from a revised -2, its lowest reading since November. Business conditions remained relatively steady but slightly below average, improving modestly from 3 to 4.
Australian Dollar rebounds from lowest level since March 2020 near 0.5900 region
The AUD/USD pair is trading near 0.5980 on Wednesday, with technical indicators on the daily chart pointing to a sustained bearish bias, as the pair remains below the nine-day Exponential Moving Average (EMA). However, the 14-day Relative Strength Index (RSI) sits below 30, suggesting the potential for a short-term corrective rebound.
Immediate support is seen at the descending trendline near 0.5914—marking the lowest level since March 2020.
On the upside, initial resistance lies at the nine-day EMA around 0.6113, followed by the 50-day EMA at 0.6259. A stronger recovery could be seen in the pair, testing the four-month high at 0.6408.
AUD/USD: Daily Chart
Australian Dollar PRICE Today
The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the strongest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.84% | -0.64% | -0.90% | -0.26% | -0.24% | -0.04% | -0.74% | |
| EUR | 0.84% | 0.20% | -0.03% | 0.55% | 0.65% | 0.79% | 0.08% | |
| GBP | 0.64% | -0.20% | -0.24% | 0.37% | 0.44% | 0.60% | -0.10% | |
| JPY | 0.90% | 0.03% | 0.24% | 0.58% | 0.70% | 0.83% | 0.12% | |
| CAD | 0.26% | -0.55% | -0.37% | -0.58% | 0.19% | 0.23% | -0.47% | |
| AUD | 0.24% | -0.65% | -0.44% | -0.70% | -0.19% | 0.15% | -0.56% | |
| NZD | 0.04% | -0.79% | -0.60% | -0.83% | -0.23% | -0.15% | -0.70% | |
| CHF | 0.74% | -0.08% | 0.10% | -0.12% | 0.47% | 0.56% | 0.70% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).
Tariffs FAQs
Tariffs are customs duties levied on certain merchandise imports or a category of products. Tariffs are designed to help local producers and manufacturers be more competitive in the market by providing a price advantage over similar goods that can be imported. Tariffs are widely used as tools of protectionism, along with trade barriers and import quotas.
Although tariffs and taxes both generate government revenue to fund public goods and services, they have several distinctions. Tariffs are prepaid at the port of entry, while taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and businesses, while tariffs are paid by importers.
There are two schools of thought among economists regarding the usage of tariffs. While some argue that tariffs are necessary to protect domestic industries and address trade imbalances, others see them as a harmful tool that could potentially drive prices higher over the long term and lead to a damaging trade war by encouraging tit-for-tat tariffs.
During the run-up to the presidential election in November 2024, Donald Trump made it clear that he intends to use tariffs to support the US economy and American producers. In 2024, Mexico, China and Canada accounted for 42% of total US imports. In this period, Mexico stood out as the top exporter with $466.6 billion, according to the US Census Bureau. Hence, Trump wants to focus on these three nations when imposing tariffs. He also plans to use the revenue generated through tariffs to lower personal income taxes.
