Australian Dollar Weakens on Risk Aversion Sentiment
The Australian dollar slumped to $0.63 on Friday, reversing earlier gains from this week as escalating global trade wars and President Trump’s volatile tariff policies raised market uncertainty. The developments raised concerns about the potential impact on the US economy, triggering a major sell-off in risk assets.
Despite this, the Aussie is still on track to gain almost 2% for the week, supported by a broadly weaker US dollar. Stronger-than-expected GDP growth and trade figures from Australia also provided additional support for the currency. On monetary policy, RBA Deputy Governor Andrew Hauser noted that the central bank is closely monitoring the impact of rising global trade tensions on domestic inflation. He stressed that it is too early to declare victory over inflation and advocated a cautious approach to any further interest rate cuts.
Source: Trading Economics