Home Daily Commentaries Aussie dollar falls to a five-year low 

Aussie dollar falls to a five-year low 

Brett Ottawa
Written by
Brett Ottawa

Brett Ottawa

OFXpert

Brett brings a wealth of experience, boasting more than 15 years in the foreign exchange market.

| Monday 7 April, 2025

Daily Currency Update

The Australian dollar is weaker this morning when valued against the Greenback, currently trading at 0.6008 at time of writing. Surpassing the low recorded in 2020 at the start of the Covid-19 pandemic. The drop follows an intensifying trade standoff between America and China, which saw Beijing slap an additional 34 per cent tariff on all US imports on Friday in retaliation for similar US levies. Markets now expect the RBA to potentially deliver back-to-back rate cuts in the next few meetings, with some banks even forecasting a 50 bps move in May. Tariffs between the US and China have been escalating since US President Donald Trump's inauguration in January. But now the broader US tariffs against key economic allies of China is causing instability for its currency, the yuan. The AUD/JPY pair also tumbled on Friday, retreating toward the 88.60 area after shedding over 4% during the day. The move represents one of the steepest intraday declines in recent sessions, dragging the pair away from the recent highs and into a mid-range zone between 87.41 and 92.64.

Key Movers

The US Dollar Index (DXY), which tracks the performance of the US dollar (USD) against six major currencies, rises on Friday and is trading near the 103 area following a stronger-than-anticipated Nonfarm Payrolls report. The US Non-Farm Payrolls (NFP) report showed a 151K rise in February versus forecasts for a 160K print, while Average Hourly Earnings increased to 4.0% from 3.9% during the same period. A deeper look at the report showed the Unemployment Rate unexpectedly widened to 4.1% from 4.0% in January, even as the Labor Force Participation Rate narrowed to 62.4% from 62.6% during the same period. Fed Chair Powell acknowledged that tariffs could have a stronger-than-anticipated inflationary and economic impact, though policy changes remain on hold for now. He reiterated that inflation is closer to target but still slightly elevated, and the Fed is monitoring uncertainty from federal policies, especially trade. Since Trump’s sweeping global tariffs announcement on Wednesday, some $8.1 trillion has been wiped from share markets around the world.

Expected Ranges

  • AUD/USD: 0.5900 - 0.6100 ▼
  • AUD/EUR: 0.5400 - 0.5600 ▼
  • GBP/AUD: 2.1200 - 2.1400 ▲
  • AUD/NZD: 1.0600 - 1.0800 ▼
  • AUD/CAD: 0.8400 - 0.8600 ▼

Written by

Brett Ottawa

OFXpert

Brett brings a wealth of experience, boasting more than 15 years in the foreign exchange market. He started his foreign exchange career with OFX more than a decade ago, as a private dealer catering to individual clients. He later transitioned to the corporate sector, assuming the position of Corporate Senior Relationship Manager. What truly excites Brett is the opportunity to engage with people, supporting their business growth and sharing in their successes.