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Explore expert forecasts and trade setups for USD/JPY in our latest market analysis here.
Aussie Dollar Outlook: Tariff Developments and China in Focus
Turning to AUD/USD, investors should monitor tariff developments and potential policy responses from China. The AUD/USD pair may face downside risk if China and other major trade partners, such as Japan, retaliate and Trump threatens more punitive tariffs.
China accounts for one-third of Aussie exports, while Japan contributes around 15%. With Australia’s trade-to-GDP ratio above 50%, weakening demand from China and Japan could impact the Aussie economy. In this scenario, the RBA could shift focus from inflation to external demand, potentially opening the door to a May rate cut. However, if China and Japan strike swift trade agreements and Trump walks back tariffs, the RBA may stay focused on inflation.
Shane Oliver, Head of Investment Strategy and Chief Economist at AMP, commented on Trump’s tariffs:
“Trump’s Retro Day tariffs likely take US average tariffs above 1930s levels. This means an increased threat to US and global growth, particularly if there is retaliation (which is likely as many of the tariffs will be hard to negotiate away).”
For a comprehensive analysis of AUD/USD trends and trade data insights, visit our detailed reports here.
Australian Dollar Daily Outlook: US Jobs Report and Fed Chair Powell
During the US session, a strong US Jobs Report and a hawkish Fed Chair Powell could lower bets on multiple Fed rate cuts. This would likely widen the US-Aussie interest rate differential in favor of the US dollar, potentially pulling the AUD/USD pair toward the 50-day EMA and $0.63.
Conversely, a cooling labor market and a dovish Fed Chair would narrow the rate differential, supporting an AUD/USD move toward the $0.63623 resistance level.
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