With all the news: "The US dollar slid sharply late last week due in part to President Trump’s announcement of impending U.S. import tariffs on steel and aluminum, sparking fears of global trade wars on the horizon. On Monday, however, the dollar steadied as markets calmed down and rebounded, and better-than-expected non-manufacturing PMI data from the U.S. indicated continued expansion of the critical services sector. Overall, the US dollar remains weak against its major counterparts, but was in the midst of a tentative rebound prior to Trump’s announcement of tariffs late last week.
Against the Australian dollar, the US dollar has shown particular strength since late January. AUD/USD has been biased to the downside in part due to rising expectations of higher interest rates from the Federal Reserve, while expectations of monetary policy changes from the Reserve Bank of Australia (RBA) have remained stagnant. On February 6th, the RBA left interest rates unchanged as widely expected, marking a full year-and-a-half without any rate changes. The central bank is not expected to raise interest rates until either late this year at the earliest, or possibly next year. The RBA’s recurring concerns about a strong Australian dollar is one of the factors precluding a more immediate rate hike."
But I predict AUD will increase stronger.
Against the Australian dollar, the US dollar has shown particular strength since late January. AUD/USD has been biased to the downside in part due to rising expectations of higher interest rates from the Federal Reserve, while expectations of monetary policy changes from the Reserve Bank of Australia (RBA) have remained stagnant. On February 6th, the RBA left interest rates unchanged as widely expected, marking a full year-and-a-half without any rate changes. The central bank is not expected to raise interest rates until either late this year at the earliest, or possibly next year. The RBA’s recurring concerns about a strong Australian dollar is one of the factors precluding a more immediate rate hike."
But I predict AUD will increase stronger.