Australian Dollar Strengthens As Trump Hints At Possible China Trade Deal
The Australian Dollar (AUD) strengthened against the US Dollar (USD) following the release of domestic employment data and China’s interest rate decision on Thursday (20/2). However, the AUD/USD pair faced headwinds as risk aversion increased amid concerns over US President Donald Trump’s latest tariffs and a cautious tone in the Federal Open Market Committee (FOMC) Minutes from its January policy meeting.
On Thursday, the Australian Bureau of Statistics (ABS) reported that Australia’s seasonally adjusted Unemployment Rate rose to 4.1% in January from 4.0% in December, in line with market expectations. Additionally, Employment Change came in at 44K for January, down from a revised 60K in December (previously 56.3K), but still beating the consensus estimate of 20K.
Reserve Bank of Australia (RBA) Deputy Governor Andrew Hauser stated while speaking to Bloomberg News on Thursday that the central bank’s policy “remains restrictive.” Hauser noted that the latest jobs data showed little cause for concern. Hauser also stressed that Australia’s monthly CPI data is still incomplete, so it is worth waiting for the quarterly figures to get a clearer picture. While market expectations point to three to four rate cuts, the RBA is still uncertain. The central bank’s primary focus remains on inflation, while global economic uncertainty poses potential risks to the Australian economy.
Source: FXStreet
