Australian Dollar declines as US Dollar rises amid shifting Fed policy signals
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The Australian Dollar depreciates as the US Dollar extends its gains for the second successive day. RBA’s Bullock warned that elevated unit labor costs and weak productivity could drive inflation above current forecasts. Trump announced a 35% tariff rate for goods imported from Canada. The Australian Dollar (AUD) loses ground against the US Dollar (USD) on Friday, halting its three-day winning streak. However, the AUD/USD pair faced challenges following the introduction of new tariff actions by US President Donald Trump. President Trump announced on Thursday a 35% tariff rate for goods imported from Canada, effective August 1. He further stated that the European Union (EU) would receive a letter notifying them of new tariff rates “today or tomorrow.” The AUD receives support after the Reserve Bank of Australia (RBA) surprisingly decided to maintain the Official Cash Rate (OCR) at 3.85% earlier this week. RBA Governor Michele Bullock stated that inflation risks persist, driven by the elevated unit labor costs and weak productivity, which could push inflation above forecasts. Moreover, RBA Deputy Governor Andrew Hauser mentioned that the global economy is facing uncertainty. Hauser also stated that tariff effects on the global economy are profound and are likely to dampen growth. Australian Dollar declines as US Dollar continues to gain ground The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against six major currencies, extends its gains for the second successive day and is trading at around 97.80 at the time of writing. The Greenback extends its gains due to evolving monetary policy signals by the Federal Reserve’s (Fed) officials. Federal Reserve Bank of Chicago President Austan Goolsbee said late Thursday that he does not support the arguments that the US central bank should cut rates to make government debt cheaper, the mandate is on jobs…
Filed under: News - @ July 11, 2025 6:23 am