- The Australian Dollar advances after the release of domestic trade balance data on Thursday.
- Australia’s Trade Surplus widened to 5,365 million MoM in June, against the expected 3,250 million.
- Trump warned that he may impose additional tariffs on China over its purchases of Russian Oil.
The Australian Dollar (AUD) edges higher against the US Dollar (USD) on Thursday, following a 0.5% gain in the previous session. The AUD/USD pair gains ground following the release of trade balance data.
The Australian Bureau of Statistics (ABS) reported that Australia’s Trade Surplus increased to 5,365 million month-over-month in June, surpassing the expected 3,250 million and the previous 1,604 million (revised from 2,238 million). The monthly Exports rose by 6.0% in June, while Imports fell by 3.1%.
China’s Trade Balance arrived at CNY705.10 billion in July, expanding from the previous figure of CNY585.96 billion. Exports rose 8.0% YoY in July following 7.2% in June, while imports increased 4.8% YoY against 2.3% recorded previously. In US Dollar (USD) terms, China’s Trade Balance arrived at +98.24 billion versus +105 billion expected and +114.77 billion priors.
US President Donald Trump warned China, Australia’s close trading partner, that he could impose further tariffs similar to the 25% levies announced earlier on India over its Russian Oil purchases, depending on what happens, per Reuters.
The Reserve Bank of Australia (RBA) is widely anticipated to deliver a 25 basis point rate cut next week, which would bring the cash rate down to 3.60%. The case for easing has grown stronger as core inflation slowed to 2.7% in June, well within the RBA’s 2–3% target, along with rising unemployment and slowing wage growth.
Australian Dollar advances as US Dollar trims recent gains
- The US Dollar Index (DXY), which measures the value of the US Dollar against six major currencies, is appreciating and trading around 98.30 at the time of writing. The US weekly Initial Jobless Claims will likely be eyed later on Thursday.
- US President Donald Trump announced on Tuesday that he will appoint the Fed’s Chair and Kugler’s replacement by the end of the week, and confirmed his choices for Chairman, including White House economic adviser Kevin Hassett, former Fed governor Kevin Warsh, and two other people. Trump also confirmed that Treasury Secretary Scott Bessent is not his choice for the Fed’s Chair.
- The Institute for Supply Management (ISM) Services PMI declined to 50.1 in July, down from 50.8 in the previous month and falling short of the expected reading of 51.5. Meanwhile, the ISM Services Prices Paid advanced to 69.9 from 67.5, the Employment Index ticked lower to 46.4 from 47.2, and the New Orders Index deflated to 50.3 from 51.3.
- The US Federal Reserve (Fed) is expected to deliver a 25 basis point rate cut in September, following weaker labor market data that has heightened concerns over the US economic outlook.
- The US and China were unable to reach an agreement on extending the 90-day tariff pause during their latest round of talks in Stockholm, Sweden. The current pause is set to expire on August 12, with the final decision resting in the hands of US President Donald Trump. In the meantime, US tariffs have been lowered from 145% to 30%, while Chinese tariffs have been reduced from 125% to 10%.
- China’s Caixin Services Purchasing Managers’ Index unexpectedly jumped to 52.6 in July from 50.6 in June. The market forecast was for a 50.2 print in the reported period.
- Australia’s Ai Group Manufacturing PMI rose by 4.9 points to -23.9 in July, indicating a slight improvement but still pointing to a deep contraction in the sector. Meanwhile, the Ai Group Australian Industry Index, a key gauge of private-sector activity, climbed 5.8 points to -3.2, its strongest reading in three years, continuing the gradual recovery trend that began in mid-2024.
- Australia was spared from the latest United States (US) tariff hikes, indicating that President Donald Trump had left the 10% baseline tariffs on Australian goods unchanged.
Australian Dollar holds position near 0.6500 after breaking above nine-day EMA
The AUD/USD pair is trading around 0.6500 on Thursday. Technical analysis on the daily chart suggests a bearish bias, with the 14-day Relative Strength Index (RSI) holding below the 50 level. However, the pair has moved above the nine-day Exponential Moving Average (EMA), signaling that short-term momentum is stronger.
On the downside, the AUD/USD pair may test the 50-day EMA at 0.6495, aligned with the nine-day EMA at 0.6494. A break below these levels could weaken the short- and medium-term price momentum and put downward pressure on the pair to test the two-month low of 0.6419, which was recorded on August 1, followed by a three-month low at 0.6372, recorded on June 23.
The AUD/USD pair could approach the psychological level of 0.6600, followed by the nine-month high at 0.6625, which was recorded on July 24.
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 Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.12% | -0.08% | 0.07% | -0.07% | -0.19% | -0.29% | -0.17% | |
| EUR | 0.12% | 0.04% | 0.19% | 0.04% | -0.08% | -0.22% | -0.06% | |
| GBP | 0.08% | -0.04% | 0.18% | 0.02% | -0.10% | -0.25% | -0.07% | |
| JPY | -0.07% | -0.19% | -0.18% | -0.12% | -0.21% | -0.39% | -0.17% | |
| CAD | 0.07% | -0.04% | -0.02% | 0.12% | -0.11% | -0.26% | -0.07% | |
| AUD | 0.19% | 0.08% | 0.10% | 0.21% | 0.11% | -0.14% | 0.05% | |
| NZD | 0.29% | 0.22% | 0.25% | 0.39% | 0.26% | 0.14% | 0.20% | |
| CHF | 0.17% | 0.06% | 0.07% | 0.17% | 0.07% | -0.05% | -0.20% |
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).
Australian Dollar FAQs
One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD.
The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive.
China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs.
Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD.
The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.
Source: Australian Dollar rises as China's trade surplus beats expectations
