The Australian Dollar (AUD) recovered slightly against the US Dollar (USD) after previously declining to 0.6200, but remains pressured by a strengthening Greenback. The US Dollar's initial gains fueled by tariff announcements have faded, leaving the AUD/USD pair struggling to break through the key 0.6300 level. Domestically, the RBA is considering a possible interest rate cut in February to combat slowing economic growth and easing inflation. The AUD's outlook remains mixed, with potential support from the Federal Reserve's (Fed) rate cut signals and headwinds from a strong USD, China's economic slowdown, and falling commodity prices.
AUD/USD faltered once again just ahead of the key 0.6300 barrier. The US Dollar remained unable to sustain the initial tariff-led bounce. President Trump opened the door to tariffs on Canada and Mexico. The US Dollar had a bumpy ride on Tuesday, with the Dollar Index briefly revisiting the 108.50 region, just to deflate afterwards as the NA session drew to a close.
Falling commodity prices have also added pressure on the currency, although the recovery in copper prices and some range bound mood in iron ore prices appear to have underpinned the currency. On a brighter note, last week’s Australian jobs report provided some positive news. The economy added a stronger-than-expected 56.3K jobs in December, although the unemployment rate nudged up slightly to 4.0% from 3.9%.
AUDUSD Usdollar Australiandollar Federalreserve RBA Interestrates Economicgrowth Inflation
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