The Australian dollar remains moderate after PBOC's interest rate decision, RBA looked at

• The Australian dollar has losses after the People's Bank of China reduced its one -year loan rate to 3.00%, compared to 3.10%.
• The reserve Bank of Australia is expected to reduce interest rates by 25 base points on Tuesday.
• The US dollar was weakened after the demotion of Moody's notes from the American credit note from AAA to AA1.

The Australian dollar (AUD) decreases Tuesday against the US dollar (USD), following a gain of more than 0.50% during the previous session. The Aud / USD pair remains under pressure after the Banque Populaire de China (PBOC) announced its interest rate decision. The PBOC announced on Tuesday a reduction in its loan bonus rates (LPR). The one -year LPR was reduced by 3.10% to 3.00%, while the LPR at five was reduced by 3.60% to 3.50%. Given the close relations between Australia and China, any change in Chinese markets can have a significant impact on the Australian dollar.

The attention of the market is now turning to the upcoming rate decision of the Bank of Australia (RBA) reserved later during the day. The central bank is expected to reduce interest rates by 25 base points, after the stronger employment data of last week.

The Aud / USD pair strengthened on Monday as the US dollar was weakened following Moody's notes destroying the American credit note from AAA to AA1. This decision is aligned with similar fitch ratings downshifts in 2023 and Standard & Poor's in 2011. Moody's now projects the American federal debt to climb to around 134% of GDP by 2035, against 98% in 2023, the budget deficit should widen almost 9% of GDP. This deterioration is awarded to the increase in debt service costs, the widening of rights programs and the drop in tax revenue.

In addition, the Australian dollar sensitive to risk has obtained the support of renewed optimism surrounding an American commercial truce of 90 days and hopes for new trade agreements with other countries. Meanwhile, the Secretary in the United States of the Treasury, Scott Bessent, told CNN on Sunday that President Donald Trump intends to implement rates at levels previously threatened on business partners who do not engage in “good-faith” negotiations.

The Australian dollar depreciated despite a lower US dollar in the middle of a dominant diet

• The US dollar index (DXY), which follows the US dollar (USD) compared to a basket of six large currencies, remains moderate and is negotiated at around 100.40 at the time of the editorial staff.
• The economic data published last week highlighted the relaxation of inflation, as the Consumer Price Index (IPC) and the Prix Producers (PPI) index reported a deceleration in price pressure. This has increased expectations that the federal reserve can implement additional rate drops in 2025, contributing to new American dollar. In addition, disappointing American retail figures have deepened concerns during a long period of slow economic growth.
• US President Donald Trump told Fox News that he tried to gain better access to China, describing the relationship as excellent and expressing his desire to negotiate directly with President XI on a potential agreement.
• The Trump administration plans to add several manufacturers of Chinese chips to its black export list, known as the “List of entities”. According to Financial Times, Trump administration officials expressed their concern Thursday evening that the taxation of export controls on the main Chinese companies at this stage could undermine the recently reached trade agreement between China and the United States during talks in Geneva this weekend.
• The National Bureau of Statistics (NBS) said on Monday that China retail sales increased by 5.1% in annual sliding (Yoy) in April, dropping from 5.5% of forecasts and down 5.9% in March. Industrial production increased by 6.1% in annual slip in the same period, beating the 5.5% expected but slowing down to the previous growth of 7.7%.
• According to the Australian Bureau of Statistics (ABS), employment jumped 89,000 in April, significantly higher than the increase of 36,400 in March and well above the 20,000 planned. Meanwhile, the unemployment rate remained unchanged at 4.1%.
• The price of wages of wages adjusted in Australia increased by 3.4% in annual sliding in the first quarter of 2025, against an increase of 3.2% of the first quarter of 2024 and exceeding market forecasts of a gain of 3.2%. This marks a resumption of the previous quarter, which has recorded the slowest growth of wages since the third quarter of 2022. On a quarterly basis, the index climbed 0.9% to T1, exceeding the planned increase of 0.8%.

The Australian dollar oscillates around 0.6450, the support appears in Nine Day Ema

AUD / USD is negotiated nearly 0.6450 Tuesday, with technical indicators on the daily graphic pointing to a bruisier bias. The pair remains above the exponential mobile average of nine days (EMA), while the relative resistance index of 14 days (RSI) is above the 50 mark, suggesting continuous upward momentum.

Uplining, immediate resistance is located at the highest of 0.6515, displayed on December 2, 2024. A sustained rupture above this level could open the door to the highest month of 0.6687 from November 2024.

The support is initially observed at the EMA of nine days of 0.6429, followed by the EMA of 50 days around 0.6363. A clear drop below these levels would probably weaken the short and medium -term perspectives, which potentially triggered a deeper drop from March 2020 from 0.5914.

AUD / USD: Daily graphic