The Australian Dollar (AUD) remains under pressure for the sixth consecutive session on Friday, with the AUD/USD pair trading around 0.6220. The extended decline follows US President Donald Trump’s reaffirmation of 25% tariffs on Mexican and Canadian goods set to take effect on March 4, alongside an additional 10% levy on Chinese imports, escalating trade war concerns.
The China-linked AUD faces further headwinds as the US ramps up tariff measures amid ongoing fentanyl-related disputes. Weaker-than-expected Australian Private Capital Expenditure data, which contracted 0.2% in Q4 2024 versus the forecasted 0.8% growth, added to the bearish sentiment. Meanwhile, Reserve Bank of Australia (RBA) Deputy Governor Andrew Hauser underscored the need for continued progress on inflation, warning that Australia’s tight labor market poses a challenge to price stability.
The US Dollar remains firm, buoyed by steady Q4 GDP growth of 2.3% and hawkish Federal Reserve commentary. Federal Reserve Bank of Atlanta President Raphael Bostic emphasized the importance of holding rates steady to curb inflation, while US Commerce Secretary Howard Lutnick reinforced the administration’s tough stance on Chinese imports.
Technically, AUD/USD trades below the nine- and 14-day Exponential Moving Averages (EMAs), with the 14-day Relative Strength Index (RSI) below 50, signaling weakening momentum. The pair is testing the psychological support at 0.6200, with a potential break opening the door to 0.6087—the lowest level since April 2020.
On the upside, immediate resistance lies at 0.6297 (nine-day EMA) and 0.6302 (14-day EMA). A sustained break above these levels could pave the way toward 0.6408, the two-month high reached on February 21.
Investors now await the US Personal Consumption Expenditure (PCE) Price Index, which could provide further direction for the pair’s next move.
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