Home Daily Commentaries AUD range bound as key tariff announcement looms

AUD range bound as key tariff announcement looms

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 25 March, 2025

Daily Currency Update

Risk sentiment improved through trade on Monday following reports at the weekend that the pending US reciprocal tariff review will be narrower in scope than first feared. Both Bloomberg and the Wall Street Journal reported tariffs would be focused on 15 nations with persistent trade imbalances, with further sector-specific tariffs to be announced as well.

Australia appears to be in the US firing line, along with key trading partners in China, the EU, India and Japan. While the promise of tariffs on Australian exports cast a pall over the currency, a softened US trade program bodes well for the broader global economy. Contrasting forces helped keep the AUD in check. It bounced between US$0.6266 and US$0.6303 and opened this morning smack bang in the middle of the daily range at US$0.6285.

Our attention today turns to the domestic budget for 2025-26. We expect few surprises and little change to macro forecasts and/or the inflation outlook. Offshore US consumer confidence, Germany’s ifo business survey and Bank of Japan policy meeting minutes round out the macroeconomic docket, while tariff headlines continue to dominate market sentiment and direction.

Key Movers

Despite a broad improvement in underlying risk sentiment, the US dollar outperformed most major counterparts on Monday. The USD DXY index is up 0.2% following stronger-than-expected US services PMI numbers and an uptick in US treasury yields. In contrast, Eurozone services PMI numbers missed the mark ensuring a gap remains between US and Eurozone macroeconomic performance, prompting some analysts to suggest that US exceptionalism is not yet dead.

With the USD on the front foot, the euro fell to intraday lows just above 1.08, while the pound held below 1.2925 and the yen gave up 150, marking one of the day's worst performances.

With mid-level data on the agenda today our focus remains on US trade policy. The weekend reports of a narrower reciprocal tariff program have bolstered hopes a full-scale global trade war may be avoided. We are keenly attuned to any further headlines that indicate the scale and scope of the US plans

Expected Ranges

  • AUD/USD: 0.6250 - 0.6350 ▲
  • AUD/EUR: 0.5780 - 0.5850 ▲
  • GBP/AUD: 2.0400 - 2.0600 ▲
  • AUD/NZD: 1.0900 - 1.1000 ▲
  • AUD/CAD: 0.8950 - 0.9050 ▼

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.