Australian Dollar advances as US Dollar depreciates due to rising debt concerns
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The Australian Dollar strengthens as the US Dollar attracts sellers due to rising US economic concerns. However, the AUD may lose its ground as the RBA could deliver further rate cuts. The US fiscal deficit could increase if Trump’s “One Big Beautiful Bill” passes the Senate. The Australian Dollar (AUD) continues to gain ground against the US Dollar (USD) on Monday, marking fresh six-month highs. The AUD/USD pair receives support as the US Dollar remains under downward pressure amid rising uncertainty surrounding the United States (US) economy. The AUD’s upside could be restrained due to dovish sentiment surrounding the Reserve Bank of Australia’s (RBA) policy outlook. Following the previous week’s 25 basis points interest rate cut by the RBA, Governor Michele Bullock mentioned that the central bank is prepared to take additional action if the economic outlook deteriorates sharply, raising the prospect of future rate cuts. The Aussie Dollar gained support from renewed optimism surrounding a 90-day US-China trade truce and hopes for further trade deals with other countries. However, the Reserve Bank of Australia will closely monitor further developments on US-China trade negotiations, as China is a major trading partner of Australia. Australian Dollar appreciates as US Dollar struggles due to fears over rising fiscal deficit The US Dollar Index (DXY), which tracks the US Dollar (USD) against a basket of six major currencies, is extending its losses and trading around 98.70. The Greenback struggles amid rising uncertainty surrounding the US economy. US markets will be closed due to the Memorial Day holiday. The US fiscal deficit could increase further when Trump’s “One Big Beautiful Bill” goes through the Senate floor, increasing the risk of bond yields staying higher for longer. Higher bond yields can keep borrowing costs higher for consumers, businesses, and governments. Trump’s bill is expected to…
Filed under: News - @ May 26, 2025 3:15 am