Explore expert forecasts and trade setups for USD/JPY in our latest market analysis here.
Aussie Dollar at Risk: US Trade Tensions vs. China’s Stimulus
While Japan’s monetary policy remains in focus, broader trade risks are also weighing on major currencies like the Aussie dollar. US-China tensions and Beijing’s stimulus efforts are influencing AUD/USD trends.
AUD/USD trends hinge on market risk sentiment after last week’s 1.63% rise to $0.63044. Rising tariff risks could impact sentiment toward global trade terms, potentially weighing on Aussie dollar demand. Australia has a trade-to-GDP ratio above 50%, underscoring the impact of weaker global demand on the Australian economy and the Aussie dollar.
Meanwhile, China’s stimulus efforts could help mitigate tariff-related risks. Given China accounts for one-third of Aussie exports, an improving Chinese economy may boost Aussie dollar demand.
RBA Governor Michele Bullock recently emphasized the potential risks associated with US tariff policies, stating;
“Global trade uncertainties and tariff threats remain unpredictable, with economic impacts dependent on implementation and market reactions.”
If global trade tensions escalate or China’s stimulus measures fall short, AUD/USD could decline toward last week’s low of $0.61867. However, easing tariff risks and stronger Chinese stimulus could drive the pair toward the March 6 high of $0.63637.
For a comprehensive analysis of AUD/USD trends and trade data insights, visit our detailed reports here.
Australian Dollar Daily Chart
Later in the US session, consumer inflation expectations will be a key driver for AUD/USD. A higher reading could lower expectations of an H1 2025 Fed rate cut. A more hawkish Fed rate path would widen the US-Australian interest rate differential, pulling the AUD/USD pair toward $0.62, a crucial support level.
Conversely, a softer inflation outlook could narrow the rate differential, potentially driving the pair toward the $0.63623 resistance level, with a possible move to $0.64.
