Home Daily Commentaries AUD under pressure as uncertainty ahead of US ‘Liberation Day’ peaks

AUD under pressure as uncertainty ahead of US ‘Liberation Day’ peaks

Matt Richardson
Written by
Matt Richardson

Matt Richardson

OFXpert

Matt provides expertise in currency risk management to his clients, drawing from his 14 years of experience in foreign exchange.

| Tuesday 1 April, 2025

Daily Currency Update

The Australian dollar underperformed on Monday, extending last week's risk-off move amid rising uncertainty and fears that a global recession is imminent. Investors have sidelined major bets ahead of the Trump administration's so-called 'Liberation Day,' when it completes its reciprocal tariff review. There is much anticipation as to what Trump will announce. Markets have speculated on how aggressive the President will be, yet mixed messaging over the last 2 weeks has only heightened uncertainty.

A Wall Street Journal article yesterday suggested that policymakers plan to introduce a blanket 20% tariff, a program that goes against comments Trump made last week, suggesting that markets would be pleasantly surprised by the leniency proffered. The AUD plunged below US$0.6250 on Monday as markets lent toward haven assets, propping up the JPY and USD. We expect the AUD will continue to underperform leading into Thursday, with today’s RBA policy announcement unlikely to meaningfully move the needle.

Near-term performance depends entirely on the outcome of the US policy review and tariff program moving forward. We expect ample volatility through the end of the week as markets respond to headlines and policy news.

Key Movers

The US dollar outperformed on Monday as haven assets carried the day amid an extension of last week's risk-off mood. Uncertainty is rife ahead of 'Liberation Day,' highlighted by the performance of equities and risk assets. Asian equities plunged on Monday while Euro stocks gave up nearly 1.5%, and US indices fell again. It's clear markets do not like the uncertainty created by the US reciprocal tariff review.

Attempts to interpret commentary have only elevated confusion, and we expect risk assets will remain under pressure until a clearer picture is made available. The US dollar climbed against most counterparts as safe haven play overwhelmed concerns for US growth under an aggressive tariff program. With the euro and GBP on the back foot, the yen was the only major that benefited from the extended risk-off push.

Our attentions remain affixed to 'Liberation Day' and the policy announcements that come.

Expected Ranges

  • AUD/USD: 0.6180 - 0.63200 ▼
  • AUD/EUR: 0.5720 - 0.5820 ▼
  • GBP/AUD: 2.0500 - 2.0800 ▲
  • AUD/NZD: 1.0950 - 1.1050 ▲
  • AUD/CAD: 0.8910 - 0.9010 ▼

Written by

Matt Richardson

OFXpert

As a Senior Corporate Client Manager, Matt provides expertise in currency risk management to his clients, drawing from his 14 years of experience in foreign exchange. Matt has clients who he has been working with for over a decade, a testament to his knowledge and dedication in the field. Matt is also a regular contributor on Ausbiz, offering clear and precise updates on currency market trends, showcasing his ability to interpret complex financial data into actionable insights.

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