Japanese Yen and Aussie Dollar News: Is a Carry Trade Unwind on the Cards?

Explore expert forecasts and trade setups for USD/JPY in our latest market analysis here.

Trade Policies and China’s Stimulus: Impact on the Aussie Dollar

USD/JPY trends and the BoJ’s monetary stance can impact demand for riskier assets and commodity currencies, such as the Aussie dollar. However, US-China trade tensions and Beijing’s stimulus plans will also influence AUD/USD trends.

Rising expectations of a US recession have triggered expectations of the US reaching a trade deal with China. A de-escalation in the US-China trade war could support China’s trade terms and bolster its economy. Given China accounts for one-third of Aussie exports, rising demand from China could boost Aussie dollar demand.

However, an escalation in the US-China trade war could impact Aussie dollar demand and potentially the Australian economy. Australia has a trade-to-GDP ratio above 50%, underscoring the influence of trade.

While US-China tariff moves will influence the AUD/USD pair, Beijing’s stimulus plans to support domestic demand could mitigate ongoing tariff risks.

Potential AUD/USD trends include:

• Bullish Scenario: A de-escalation in the US-China trade war and fresh stimulus from Beijing could drive the AUD/USD pair above the 50-day EMA and $0.63623 resistance level.
• Bearish Scenario: Escalating trade tensions and delays in stimulus rollouts could weigh on AUD demand, pulling the AUD/USD pair toward $0.62.

For a comprehensive analysis of AUD/USD trends and trade data insights, visit our detailed reports here.

Australian Dollar Daily Outlook: Fed Policy and US CPI Impact

Later in the US session, the US CPI Report will influence the US-Australia interest rate differential. A hotter-than-expected inflation reading could signal a more hawkish Fed rate path, widening the US-Aussie rate differential in favor of the US dollar. Under this scenario, the AUD/USD could drop toward the $0.62 level, a crucial support level in recent weeks.

Conversely, softer core inflation may narrow the rate differential, pushing the pair above the 200-day EMA to target the $0.63623 resistance level.