Aussie dollar continues to retreat ahead of expected trade talks
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Daily Currency Update
The Australian dollar is slightly weaker this morning when valued against the Greenback, currently trading at US$0.6415 at time of writing. The AUD traded lower on Wednesday, after failing to break above a key resistance level, with markets feeling cautious ahead of commentary from US Federal Reserve (Fed) Chair, Jerome Powell and high-level trade talks between the US and China. Powell warned on Wednesday that President Donald Trump’s tariff regime could lead to increased inflation and unemployment, as well as a slowdown in the US economy. Powell spoke to reporters after announcing that the Fed will not be changing its key interest rates in response to Trump’s tariff policies and global trade dispute. “In support of its goals, the committee decided to maintain the target range for the federal funds rate at 4-1/4 to 4-1/2 percent,” the Fed wrote in its Open Market Committee statement.Key Movers
The US dollar Index (DXY) initially fell to 99.50 after the Federal Reserve left rates unchanged at 4.5%, citing persistent inflation and rising risks to both sides of its dual mandate. US stocks ended a choppy day higher after the Federal Reserve left its main interest rate alone, as was widely expected, but also warned about rising risks for the US economy. The S&P 500 rose 0.4%. The index is coming off a two-day losing streak that had snapped its nine-day winning run. The Dow Jones rose 0.7%, and the Nasdaq composite added 0.3%. Fed Chair Jerome Powell said the central bank has time to wait before making any potential moves on rates, but he warned that sustained tariffs could both weaken the economy and trigger higher inflation. In the bond market, Treasury yields fell following the Fed’s announcement. The yield on the 10-year Treasury eased to 4.27% from 4.30% late Tuesday. Gold prices slightly jumped past $3,390 but failed to get to $3,400. Conversely, a dovish stance could pave the way for gold buyers to test $3,450 and possibly the record high of $3,500.Expected Ranges
- AUD/USD: 0.6300 - 0.6500 ▼
- AUD/EUR: 0.5600 - 0.5800 ▼
- GBP/AUD: 2.0550 - 2.0750 ▲
- AUD/NZD: 1.0700 - 1.0900 ▲
- AUD/CAD: 0.8800 - 0.9000 ▼