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- The AUD/USD continues to face the declining pressure amid the US and China trade negotiations.
- Beijing is unlikely to relieve definitions before the upcoming talks in Switzerland, providing uncertainty in the market and weakening the spirits of risk.
- President Trump announced a “major” trade agreement with the United Kingdom, although the main definitions will remain 10 %.
AUD/USD pair Her losing plan continues for the third consecutive session, where she trades near 0.6390 during the Asian session on Friday. The Australian dollar (AUD) remains under pressure due to the progress in the trade negotiations of the United States and China. Given the close economic relations between Australia and China, any pressure on the Chinese economy tends to influence AUD.
According to The Global Times – which refers to the Chinese embassy in the United States – is unlikely to reduce Beijing from the definitions before the upcoming talks in Switzerland. This adds to uncertainty in the market and reduces the feeling of risk.
In the United States (the United States), President Donald Trump adopted a firm position on Chinese commercial policy, after the appointment of a new envoy to Beijing. While there are discussions on customs tariff exemptions, the administration seems cautious, as Trump stated that they “are not looking for many exemptions.”
Meanwhile, according to what China is studying a major change in the real estate market-which leads to the sale of pre-selling homes and allowing the sale of complete real estate only. This step, which aims to stabilize the property sector, is part of a broader reform plan that is still under development. The regulations will apply to future land sales, with the exception of public housing, and local governments will get flexibility in implementation.
the US dollar The index (DXY), which measures the value of the US dollar (USD) against the work basket American economic data And long -returning differences. However, the initial optimism surrounding the Trade and USA agreement faded, as it has become clear that the current definitions of 10 % will remain in place.
Questions and answers in Australian dollars
One of the most important factors for the Australian dollar (AUD) is the level of interest rates set by the Australian Reserve Bank (RBA). Since Australia is a resource -rich country, the other main engine is the largest export price, iron ore. The health of the Chinese economy, the largest commercial partner, is a factor, as well as inflation in Australia, the rate of growth and commercial balance. Market morale-whether investors are eating more risky assets (risk) or searching for safe materials (risk)-is also a worker, with positive risks for AUD.
The Australian Reserve Bank (RBA) affects the Australian dollar (AUD) by determining the level of interest rates that Australian banks can persuade each other. This affects the level of interest rates in the economy as a whole. The main goal of RBA is to maintain a stable inflation rate of 2-3 % by setting interest rates up or down. Relatively high interest rates are supported compared to other main central banks, and relatively low vice versa. RBA can also use and tighten quantitative dilution to influence credit conditions, with previous AUD negative and positive to AUD.
China is the largest commercial partner in Australia, so the health of the Chinese economy is a major impact on the value of the Australian dollar (AUD). When the Chinese economy does a good job, it buys more raw materials, commodities and services from Australia, raising the demand for AUD, and raising its value. The opposite is the case when the Chinese economy does not grow at the speed available. Positive or negative surprises in Chinese growth data, therefore, they often have a direct impact on the Australian dollar and its wives.
Iron Ore is the largest export in Australia, as it represents 118 billion dollars annually according to data from 2021, with China as its main destination. Therefore, the price of iron ore can be an engine for the Australian dollar. In general, if the price of iron ore rises, the AUD also rises, as the total demand for the currency increases. The opposite is the case if the price of iron ore decreases. Iron ore prices also tend to increase the possibility of a positive commercial balance for Australia, which is also positive for AUD.
The commercial balance, which is the difference between what a country gains from its exports in exchange for what it pays to its imports is another factor that can affect the value of the Australian dollar. If Australia produces very required after exports, its currency will obtain a value of the excess demand created from foreign buyers who seek to buy its exports in exchange for what it spends to buy imports. Therefore, the positive net trade balance enhances AUD, with the opposite effect if the trade balance is negative.
