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The Australian Dollar loses ground as Trump plans to impose a 25% tariff on all steel and aluminum imports. The AUD faced challenges as China’s retaliatory tariffs on certain US exports have come into effect. The US Dollar received support as January’s job report reinforced the cautious mood surrounding the Fed’s policy outlook. The Australian Dollar (AUD) remains under pressure against the US Dollar (USD) for the third consecutive day on Monday, weighed down by escalating trade war concerns. The AUD/USD pair faces downward momentum after US President Donald Trump, speaking aboard Air Force One, announced plans to impose a 25% tariff on all steel and aluminum imports without specifying the affected countries. President Trump also stated that additional reciprocal tariffs would be unveiled by midweek, set to take effect almost immediately, matching the tariff rates imposed by each country, according to Reuters. The Australian Dollar also weakened amid growing concerns over the US-China trade war, given Australia’s close economic ties with China. A new US levy on Chinese imports took effect last week, while China’s retaliatory tariffs on certain US exports began this Monday. Last week, Trump and Chinese President Xi Jinping had been expected to negotiate a resolution after reports surfaced about a potential phone call between the two leaders. However, that call was reportedly canceled, though hopes remain that it may still take place. Traders are increasingly confident that the Reserve Bank of Australia (RBA) will cut its 4.35% cash rate at its upcoming meeting later in February, with market expectations suggesting a 95% probability of a reduction to 4.10%. This follows data indicating that underlying inflation has moderated faster than the RBA had anticipated, prompting several major Australian banks to move their forecast for the first rate cut from May to February. Australian Dollar declines as…

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Filed under: News - @ February 10, 2025 2:23 am