Australian Dollar receives support from US-Australia critical minerals deal
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The Australian Dollar (AUD) advances against the US Dollar (USD) on Tuesday, extending its gains for the third successive session. The AUD/USD pair appreciates as the AUD receives support from improved market sentiment amid progress on a United States (US)-Australia trade agreement. US President Donald Trump and Australian Prime Minister Anthony Albanese signed an USD 8.5 billion critical minerals agreement at the White House on Monday, aimed at securing access to Australia’s abundant rare-earth resources amid China’s tighter export controls. The US and Australia committed to investing at least USD 1 billion each over the next six months in mining and processing projects, while also agreeing to establish a price floor for critical minerals. Trump noted that the agreement had been “negotiated over several months,” while Albanese described it as taking US–Australia relations “to the next level.” President Trump also said he expects to reach a “fair deal” with China’s President Xi Jinping during their upcoming meeting in South Korea, signaling a possible easing of trade tensions. However, US Trade Representative Jamieson Greer adopted a tougher stance, accusing Beijing of engaging in a “broader pattern of economic coercion” targeting companies making strategic investments in critical US industries. Any shift in China’s economic conditions could also affect the Australian dollar (AUD), given the close trade ties between China and Australia. US Dollar declines as government shutdown extends into third week The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against six major currencies, is losing ground for the second consecutive day and trading around 98.50 at the time of writing. The Greenback struggles amid the ongoing US government shutdown continues to weigh on the broader economic outlook. Additionally, the increased likelihood of Fed rate cuts put downward pressure on the US Dollar. The US federal government…
Filed under: News - @ October 21, 2025 2:13 am