AUD/USD outlook hinges on US-China trade thaw and RBA guidance, with potential upside toward $0.65.
The Aussie dollar remains sensitive to trade developments, especially involving China, Australia’s largest trade partner. Hopes of US-China tariff negotiations could lift AUD/USD. Lower tariffs would boost Chinese demand, benefiting Australia’s trade terms and economic outlook. With one-third of Australian exports bound for China and a trade-to-GDP ratio above 50%, the influence of tariff developments on the RBA’s rate path is significant.
An upswing in exports could support a less dovish RBA rate path. However, an escalation in the US-China trade war could impact demand, raising bets on multiple RBA rate cuts. A more dovish RBA stance would pressure Aussie dollar demand.
AUD/USD: Market-Moving Factors
Bullish Aussie dollar Scenario: A de-escalating US-China trade war or hawkish RBA rhetoric may send the AUD/USD pair above the 200-day Exponential Moving Average (EMA), targeting $0.65.
Bearish Aussie dollar Scenario: Tariff threats or dovish RBA signals could drag the pair below the $0.63623 support level, bringing the 50-day EMA into play.
For a comprehensive analysis of AUD/USD trends and trade data insights, see our top trading signals amid tariff tensions here.
Aussie Dollar Daily Outlook: Fed Speakers in Focus
US session developments will influence US-Aussie rate differentials. A dovish Fed stance may narrow the differential, favoring the Aussie and sending the AUD/USD pair above the 200-day EMA and toward $0.65.
However, Fed calls to delay rate cuts in response to tariffs could widen the rate differential, pushing the pair below the $0.6323 support level.
