AUD/USD with gains after soft US data

The AUD/USD pair trades higher around 0.6400, up 0.26% on the day.
US GDP data misses expectations, showing a contraction of 0.3% in Q1 2025.
Market expectations for a Fed rate cut in June rise as weak data weighs on the USD.
Investors remain cautious ahead of key US data releases, including NFPs and GDP for Q1 2025.

Patricio Martín FXStreet

The AUD/USD pair saw a slight uptick as investors weighed weak United States (US) economic data, including a contraction in Q1 GDP. The market now expects potential Federal Reserve (Fed) rate cuts, which have pressured the US Dollar (USD). Despite ongoing trade tensions and uncertainty, the Australian Dollar (AUD) performed well, with the pair trading near the 0.6400 level. The next key focus will be the release of US Nonfarm Payrolls and GDP data later this week.

Daily digest market movers: Weak US GDP, tariff concerns persist

The AUD/USD pair rises after testing resistance near 0.6417, buoyed by weaker-than-expected US GDP.
President Donald Trump hints at trade talks with Canada, but uncertainty remains over US-China negotiations.
China’s weak manufacturing PMI adds to the risk-off sentiment, impacting commodity prices like copper.
The US Dollar Index (DXY) hovers flat at 99.30, as traders await key economic data releases.
Personal consumption data shows modest growth, but the overall economic outlook remains uncertain.
The US labor market shows signs of slowdown, with ADP Employment data missing expectations.
Traders are closely watching the PCE inflation data, with markets pricing in potential rate cuts.
President Trump’s comments on tariffs and trade policy keep investors on edge, impacting the USD.
The DJIA drops 0.51% as the Q1 GDP contraction weighs on market sentiment.
The Reserve Bank of Australia (RBA) remains cautious on inflation, with softer CPI data increasing rate cut expectations.
Global uncertainty surrounding trade policies keeps market volatility elevated, particularly in the FX market.

Technical Analysis: AUD/USD maintains bullish outlook despite US Dollar weakness

The AUD/USD pair is showing a bullish signal, trading around 0.6400, up 0.26% on the day. The pair is currently positioned mid-range between 0.6356 and 0.6417. The Relative Strength Index (RSI) is neutral at 56.96, while the Moving Average Convergence Divergence (MACD) indicates a buy signal. The Awesome Oscillator is neutral at 0.0096. Short-term moving averages, including the 10-day SMA at 0.6391 and the 100-day SMA at 0.6281, support the bullish outlook. However, the 200-day SMA at 0.6463 suggests a longer-term sell signal. Support levels are at 0.6391, 0.6377, and 0.6342, while resistance levels sit at 0.6409, 0.6411, and 0.6463.

Tariffs FAQs

What are tariffs?

Tariffs are customs duties levied on certain merchandise imports or a category of products. Tariffs are designed to help local producers and manufacturers be more competitive in the market by providing a price advantage over similar goods that can be imported. Tariffs are widely used as tools of protectionism, along with trade barriers and import quotas.

What is the difference between taxes and tariffs?

Although tariffs and taxes both generate government revenue to fund public goods and services, they have several distinctions. Tariffs are prepaid at the port of entry, while taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and businesses, while tariffs are paid by importers.

Are tariffs good or bad?

There are two schools of thought among economists regarding the usage of tariffs. While some argue that tariffs are necessary to protect domestic industries and address trade imbalances, others see them as a harmful tool that could potentially drive prices higher over the long term and lead to a damaging trade war by encouraging tit-for-tat tariffs.

What is US President Donald Trump’s tariff plan?

During the run-up to the presidential election in November 2024, Donald Trump made it clear that he intends to use tariffs to support the US economy and American producers. In 2024, Mexico, China and Canada accounted for 42% of total US imports. In this period, Mexico stood out as the top exporter with $466.6 billion, according to the US Census Bureau. Hence, Trump wants to focus on these three nations when imposing tariffs. He also plans to use the revenue generated through tariffs to lower personal income taxes.

Author

Patricio Martín

FXStreet

Patricio is an economist from Argentina passionate about global finance and understanding the daily movements of the markets.

GBP/USD holds range near 1.3500 after UK growth data

GBP/USD keeps its range near the 1.3500 psychological mark in the European session on Thursday after the mixed macroeconomic data releases from the UK failed to trigger a noticeable market reaction. Meanwhile, the US Dollar stabilizes after the US CPI data-led sell-off, checking any upside attempts in the pair.

EUR/USD flatlines above 1.1500 ahead of US producer inflation data

EUR/USD clings to marginal gains above 1.1500 on Thursday. The pair stalls its rebound as the US Dollar consolidates losses incurred after the release of July's Consumer Price Index report. Investor await US producer inflation data, while keeping a close eye on the headlines coming out of the Middle East.

Gold stays weak below $4,400 as USD stalls post-CPI decline

Gold holds its intraday retracement slide from the highest level since June 5 at the $4,450 area touched earlier this Thursday, and trades below the $4,400 mark in the European session. The initial market reaction to signs of moderating US inflation fades quickly as investors remain worried that higher energy prices will rekindle inflationary pressures, pausing the US Dollar's downside.

XRP holds at make-or-break level, ADA and SOL risk 50-day EMA breakout

Top altcoins, including Ripple, Cardano, and Solana, are facing downside pressure, holding at crucial support levels. The technical outlook for XRP, ADA, and SOL indicates a mild bearish bias as downside pressure mounts.

Boring CPI, boring August?

Yesterday’s unexciting US CPI print left FX with little sense of direction into the end-August Jackson Hole Symposium. What can stop this relentless decline in volatility? Gulf news, Fedspeak and big surprises in tier-two data are all possible candidates. But there’s a good chance they won’t, and EUR/USD may stay in tight ranges for the next few weeks.

Why is Crude Oil priced for a reopening the ships haven't made?

Fourteen vessels crossed the Strait of Hormuz on Tuesday. Before the war, the count ran near 120 a day. In the sessions since the waterway was publicly declared open, Brent has drifted back to $87 and West Texas Intermediate (WTI) to $81, both a little lower again on Wednesday, with daily momentum on each unwound from the top of its range in late July to the low twenties now.