- AUD/USD correction from 0.6500 while the private sector of Chinese faces pressure due to the higher tariffs imposed by the US.
- Both Caixin Manufacturing and Services PMI grew moderately in April.
- The Fed is expected to leave interest rates stable on Wednesday.
The AUD/USD pair was correctly close to 0.6450 in the European session of Tuesday from a five-month high of 0.6500 posted on Monday. The Aussie pair retreated as Australia Dollar (AUD) underperforms across the board due to a slowing down business activity in China.
The price of Australia's dollar today
The table below shows the percentage change of Australian dollar (AUD) against the current currencies now. Australia's dollar is the strongest against Swiss Franc.
| USD | EUR | Gbp | Jpy | Cad | Aud | Nzd | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.01% | -0.24% | -0.36% | -0.03% | 0.27% | -0.11% | 0.42% | |
| EUR | 0.01% | -0.24% | -0.36% | -0.02% | 0.27% | -0.10% | 0.43% | |
| Gbp | 0.24% | 0.24% | -0.13% | 0.21% | 0.53% | 0.13% | 0.69% | |
| Jpy | 0.36% | 0.36% | 0.13% | 0.32% | 0.63% | 0.33% | 0.80% | |
| Cad | 0.03% | 0.02% | -0.21% | -0.32% | 0.29% | -0.09% | 0.47% | |
| Aud | -0.27% | -0.27% | -0.53% | -0.63% | -0.29% | -0.38% | 0.19% | |
| Nzd | 0.11% | 0.10% | -0.13% | -0.33% | 0.09% | 0.38% | 0.56% | |
| CHF | -0.42% | -0.43% | -0.69% | -0.80% | -0.47% | -0.19% | -0.56% |
The heat map shows the percentage change of basic currencies against each other. The base currency is taken from the left column, while the quote currency is taken from the top row. For example, if you choose the Australian dollar from the left column and move to the horizontal line in the US dollar, the percentage change shown in the box represents AUD (Base)/USD (quote).
The signs of moderate growth in economic activities in China are weighing Aussie's dollar, which has been given Australia's significant hope in its exports to Beijing.
Caixin Manufacturing and Services Purchasing Managers' Index (PMI) data for April has shown that businesses are facing pressure due to the collapse of higher US president (US) tariffs Donald Trump. Activities in both the manufacturing sector and services expand at moderate speeds. Exports from China to the US face a 145% import duty, limiting US companies from buying from their Chinese trade partners.
Inside the home, the hopes of firming that the Reserve Bank of Australia (RBA) will reduce the official cash rate (OCR) at the policy meeting later this month also pushed the AUD to the backfoot.
Meanwhile. The US dollar index (DXY), which monitors the greenback value against six major currencies, rebounds from a low day of 99.50 to close to 99.75.
According to the CME Fedwatch tool, entrepreneurs have fully priced that the Fed will leave interest rates stable at a range of 4.25% -4.50% for the third straight assembly in succession.
US Dollar FAQ
The US dollar (USD) is the official currency of the United States of America, and the 'de facto' currency of a significant number of other countries in which it is found in circulation next to local notes. This is the most severely exchanged currency in the world, worth more than 88% of all global foreign exchange transfers, or an average of $ 6.6 trillion in transactions per day, according to data from 2022. Following World War II, the USD took from the British Pound as the world's reserve currency. For most of its history, the US dollar was gold -back, to the Bretton Woods agreement in 1971 when the gold standard left.
The most important single factor affecting the value of the US dollar is financial policy, shaped by the Federal Reserve (FED). Fed has two mandates: to achieve control inflation and promote full work. Its main tool to achieve these two goals is by organizing interest rates. When prices rise rapidly and inflation is above the target of 2% of the Fed, the Fed will increase rates, which contributes to USD value. When inflation falls below 2% or the unemployment rate is too high, the Fed may lower interest rates, with a greenback weight.
In extreme situations, the federal reserve can also print more dollars and make easing (QE) volume. QE is the process by which the Fed greatly increases the flow of credit to a stuck financial system. This is a non -standard policy proposal used when credit is dry because banks will not lend to each other (out of fear of default counterparts). This is a last way if only the decrease of interest rates is not likely to achieve the required result. It was the Fed weapon chosen to fight the credit crunch that occurred during the great financial crisis in 2008. It involves the Fed printing more dollars and used them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US dollar.
The quantity of tightening (QT) is the reverse process in which the federal reserve stops buying bonds from financial institutions and does not re -consist of the principal from the bonds it holds in new purchases. This is usually positive for the US dollar.
