Explore expert forecasts and trade setups for USD/JPY in our latest market analysis here.
Tariff Uncertainty, Beijing’s Stimulus, and the RBA Rate Path
While USD/JPY trends and the BoJ’s monetary policy outlook remain key for the markets, near-term AUD/USD trends hinge on Trump’s tariff policies and Beijing.
Trump has already raised tariffs by 20% on Chinese goods and introduced sweeping 25% tariffs on steel and aluminum. Beijing has vowed to retaliate, with the Foreign Ministry stating:
“China will take all necessary measures to safeguard its rights, interests. If US insists on suppressing China, China must resolutely counter it.”
Given that China accounts for one-third of Aussie exports, a tit-for-tat trade war could impact the Aussie economy. With a trade-to-GDP ratio above 50%, a waning economy may boost expectations of an H1 2025 RBA rate cut. A more dovish RBA rate path would likely pressure the AUD/USD pair.
However, stimulus measures from Beijing boosting demand and domestic consumption could mitigate tariff risks. Stronger demand from China may temper RBA rate cut bets, driving Aussie dollar demand.
Potential AUD/USD trends include:
- Bullish Scenario: A de-escalation in the US-China trade war and fresh stimulus from Beijing may push the AUD/USD pair above the 50-day EMA and $0.63623 resistance level.
- Bearish Scenario: Escalating trade tensions and underwhelming stimulus efforts could weaken the Aussie dollar, pulling the AUD/USD pair toward $0.62.
For a comprehensive analysis of AUD/USD trends and trade data insights, visit our detailed reports here.
Australian Dollar Daily Outlook: Consumer Sentiment and the Fed
Later in the US session, the Univeristy of Michigan numbers could affect the US-Aussie interest rate differential. A weaker-than-expected consumer sentiment could fuel Fed rate cut bets, narrowing the rate differential in favor of the Aussie dollar. Under this scenario, the AUD/USD pair could break above the 50-day EMA, bringing the $0.63623 resistance level into play.
However, a higher consumer sentiment reading and higher inflation expectations may temper expectations of a June Fed rate cut. A widening rate differential, favoring the US dollar, could drag the AUD/USD pair toward $0.62.