Home Daily Commentaries AUD buoyed as markets revise China growth expectations

AUD buoyed as markets revise China growth expectations

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.

| Wednesday 14 May, 2025

Daily Currency Update

The AUD outperformed Tuesday, buoyed by new hopes that improved US/China trade relations will bolster global growth. Having fallen through trade on Monday, the AUD recouped losses, bouncing off intraday lows just above US$0.6350, breaking above US$0.64 and US$0.6450 to touch session highs of US$0.6471. US and China growth expectations have been revised higher since the 90-day moratorium on tariffs was announced, driving gains across risk assets, equities, and industrial commodities. Since the joint announcement on tariffs, further concessions have been made with the US reducing taxes on low-value parcels from China while China lifted restrictions imposed on its Airlines, allowing US airplane manufacturers to complete delivery on orders. The abrupt shift in relations has prompted investors to revise growth expectations with the likelihood of a US recession now reduced. With little of note on today’s macroeconomic calendar, our attention remains on tariff headlines.

Key Movers

The US dollar underperformed Tuesday, relinquishing Monday’s upswing, and losing ground against all G10 counterparts. The DXY index fell nearly 1% as commodity currencies outperformed. US and China growth expectations have been revised higher in response to the 90-day moratorium on tariffs, fueling an extended uptick across risk assets. Equities extended Monday’s gains while a marginal downside surprise in US inflation data was largely ignored. Fed rate cut expectations are little changed with markets pricing a 52-basis point adjustment into year-end, down from 56 points before the print. With the USD on the back foot, the euro pushed back above 1.11 to mark session highs just short of 1.12 while the pound pushed above 1.33 and the yen forced the dollar back below 147.50. With little of note on today’s macroeconomic agenda, our attention remains on tariff headlines. Any signal of further thawing in tensions should help bolster the uptick in risk sentiment.

Expected Ranges

  • AUD/USD: 0.6350 - 0.6520 ▲
  • AUD/EUR: 0.5680 - 0.5820 ▲
  • GBP/AUD: 2.0400 - 2.0800 ▼
  • AUD/NZD: 1.0850 - 1.0950 ▲
  • AUD/CAD: 0.8900 - 0.9100 ▲

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.

View previous day