AUD Gains Against USD Amid Trade Uncertainty
The AUD and NZD's gains against the USD come as the US dollar weakens due to lower yields, but the decline in Chinese consumer prices and uncertainty surrounding trade policies continue to cloud the outlook for the two currencies, with the AUDUSD price expected to trade in a range between 0.6280 and 0.6330.
The Australian dollar rose 0.1% to $0.6314, while the New Zealand dollar gained 0.2% to $0.5717, as US President Donald Trump's comments on trade policies sparked a flight to safety into bonds, weakening the US dollar due to lower yields.
The Aussie and Kiwi dollars, often seen as proxies for global risk, have been sensitive to Trump's trade policies, which have been a concern for the two currencies. Despite this, the decline in Chinese consumer prices has clouded the outlook for the two currencies. The Japanese yen and Swiss franc also rose, with the yen increasing 0.5% and the franc gaining 0.3%.
The AUDUSD price is leaning on the EMA50 and showing positive signals, with stochastic indicating a potential rise to the key level of 0.6322$. According to UOB Group's FX analysts, Quek Ser Leang and Peter Chia, the AUD/USD currency pair is expected to trade between 0.6280 and 0.6330, with a breach of 0.6265 suggesting that the AUD is likely to trade in a range rather than recover.
The analysts' 1-3 week view suggests that the AUD could recover and reach 0.6410, but the buildup in momentum is slowing, and the currency has not made significant headway on the upside. As the US duties on steel and aluminum are set to come into effect, the outlook for the AUD and NZD remains uncertain, with investors closely watching the developments in the trade landscape.
