empty
12.03.2025 12:43 AM
Commodity Currencies Remain Under Growing Pressure Despite Overall Dollar Weakness. AUD/USD Analysis

The tension caused by the new U.S. administration's aggressive efforts to revise tariffs has also affected Australia. According to NAB, business conditions showed slight improvement in February, with modest increases in trading conditions and profitability. However, there was a significant decline in business confidence, which dropped by 6 points, largely negating the improvement made in January. This brought confidence below the long-term average and back into negative territory.

This image is no longer relevant

Revised data indicated a quarter-on-quarter growth of 0.6% and a year-on-year increase of 1.3%, which slightly exceeded the expectations of the Reserve Bank of Australia (RBA). Private consumption grew by 0.4% quarter-on-quarter, which is an improvement over previous quarters, but still insufficient to drive overall economic growth.

For the RBA, the incoming data appears neutral. The rate forecast suggests one more rate cut in May, with a projected final level of 3.1% by 2026. This forecast aligns with market expectations for the Federal Reserve's rate in 2026, indicating no clear driver for future rate divergence. At least for now, this minimizes the likelihood of significant movements in either direction.

U.S. President Trump responded to Canada's introduction of an import tax on electricity from the U.S.—which the Canadian government imposed as a retaliatory measure—by raising tariffs. Duties on Canadian steel and aluminum have now reached 50%. Markets reacted with a decline, and this downturn is likely to spread across the entire commodities sector. Selling anything in the U.S. is becoming increasingly complex, and where else can exports go if not to the U.S.? While Australia does not face a direct threat, there is an indirect risk of declining activity in the mining sector and a potential overall drop in exports, which is a negative outlook for the Aussie.

Net short positions on the AUD increased by $134 million over the reporting week to -$3.034 billion, with positioning remaining bearish. The calculated price is above the long-term average, offering hope for a corrective upward movement.

This image is no longer relevant

The AUD/USD currency pair is currently trading in a sideways range, with the nearest resistance level at 0.6400/20. This target, which was identified last week, remains unachieved. The Australian dollar is lacking the internal momentum necessary for a resurgence, and additional pressure arises from rising concerns about a possible U.S. recession, which is heavily impacting commodity currencies. We anticipate that trading will remain range-bound, with a slightly increased likelihood of a slow movement towards the 0.5400/20 level. However, a strong rally is not expected.

Kuvat Raharjo,
Analytical expert of InstaForex
© 2007-2025
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

XAU/USD. Analysis and Forecast

Gold maintains a bearish tone today, though it has slightly recovered from the daily low, climbing back above the $3300 level. Investors continue to hope for a potential de-escalation

Irina Yanina 12:23 2025-04-25 UTC+2

The Market Has Nowhere Left to Run

While Donald Trump and Beijing are still trying to figure out whether trade negotiations between the U.S. and China are happening at all, the S&P 500 continues to climb

Marek Petkovich 11:57 2025-04-25 UTC+2

The U.S. Dollar Rises — Here's Why

The U.S. dollar strengthened against a number of global currencies, as did the U.S. stock market, following reports that the Chinese government is considering suspending its 125% tariffs on certain

Jakub Novak 11:31 2025-04-25 UTC+2

Why Could Gold Prices Drop Significantly? (There's a chance gold will continue to decline while the CFD on the NASDAQ 100 futures contract may rise)

The beginning of actual negotiations could lead to a significant drop in gold prices in the near future. In previous articles, I suggested that the previously surging price of gold

Pati Gani 10:14 2025-04-25 UTC+2

GBP/USD Overview – April 25: The Fed Is Starting to Worry for Real

The GBP/USD currency pair traded higher on Thursday, remaining near its 3-year highs. Despite the British pound's strong rally in recent months, corrections are still rare in the forex market

Paolo Greco 07:57 2025-04-25 UTC+2

EUR/USD Overview – April 25: America Files a Lawsuit Against Trump

The EUR/USD currency pair continued to trade calmly on Thursday, although volatility remained relatively high. This week, the US dollar showed some signs of recovery—something that could already be considered

Paolo Greco 07:57 2025-04-25 UTC+2

What to Pay Attention to on April 25? A Breakdown of Fundamental Events for Beginners

A few macroeconomic events are scheduled for Friday, but this doesn't matter, as the market continues to ignore 90% of all publications. Among the more or less significant reports today

Paolo Greco 07:06 2025-04-25 UTC+2

The Yen Is Looking Stronger and Stronger

The nationwide Consumer Price Index published last week showed accelerated core inflation in March—from 2.6% to 2.9%. Inflationary pressure is increasing, supporting the case for further interest rate hikes

Kuvat Raharjo 01:23 2025-04-25 UTC+2

Canada Awaits Election Results. USD/CAD Outlook

Last week, the Bank of Canada kept its interest rate unchanged at 2.75%, as expected. The accompanying statement was neutral in tone, emphasizing ongoing uncertainty. Confidence is hard to maintain

Kuvat Raharjo 00:59 2025-04-25 UTC+2

The Australian Dollar Could Suffer If the U.S.-China Trade War Escalates

U.S. President Donald Trump once again commented on Federal Reserve Chairman Jerome Powell, openly expressing dissatisfaction with the pace of rate cuts. Another public expression of disapproval of the Fed's

Kuvat Raharjo 00:59 2025-04-25 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.