The Aussie dollar’s in a weird spot right now, man. Everyone’s looking at the RBA, thinking they’ll slice off another 25 basis points in May. All eyes are on China too, with Foreign Minister Wang Yi going on about how talking’s better than fighting when it comes to US-China trade dramas. But, the good old US dollar isn’t having the best time either, thanks to Trump and his wild trade moves.
Yesterday, the Aussie was on a bit of a high, climbing over 0.50% against the USD. But then it slid back down. It’s all because the US dollar’s been getting a boost with trade tensions seeming to cool off a bit. Trump’s been hinting at lowering Chinese tariffs, and China’s giving a pass to some US goods. Makes everyone think maybe this epic trade battle might actually be wrapping up. As Wang Yi said, backing down just makes the bully bolder—so, keep the chats going, right?
But hold on, Trump’s saying he’s making moves with China’s Prez, Xi Jinping. Meanwhile, a Chinese spokesperson fired back saying, “Nuh-uh, we’re not talking tariffs.” It’s like they’re all playing a big game of telephone, everyone getting mixed messages.
Now, the traders, they’re glued to the upcoming Aussie inflation report. It could change the game for the RBA and what they’ll do next. People are betting on that 25-basis-point cut in May, especially with Uncle Sam throwing new tariffs into the mix.
Despite all this chaos, the Aussie could bounce back if American assets keep looking sketchy. The US Dollar Index might be sitting pretty at 99.00, but everyone’s jittery about Trump’s trade antics. If things heat up again with China, the Greenback could start sweating.
This car tariff business—Trump wants to keep them light, trying not to stack up tariffs on foreign cars, and cutting some on parts. US Treasury man Scott Bessent said he chatted with China, no tariff talk though. It’s like they’re playing chicken, waiting to see who flinches first.
Oh, the Westpac crew said the RBA’s probably gonna drop interest rates by 25 basis points on May 20. They’re playing it data-driven, so, who knows what comes after that.
Meanwhile, the AUD/USD pair is chilling around 0.6420, looking bullish. But if it cracks 0.6439, it could spike toward 0.6515. On the downside, the nine-day EMA at 0.6387 offers some support, with more at 0.6312. If things go south, we could be looking at March lows near 0.5914.
So, yeah, it’s a mess, but that’s the market for ya. Always something brewing, always something ready to flip everything on its head. Keep your eyes peeled and fingers crossed.
