AUD/USD PLUMMETS BELOW MID-0.6200s AS TRADE-WAR FEARS LIFT RBA RATE CUT BETS
AUD/USD PLUMMETS BELOW MID-0.6200s AS TRADE-WAR FEARS LIFT RBA RATE CUT BETS
The Australian Dollar (AUD) has experienced a notable decline against the U.S. Dollar (USD), with the AUD/USD pair falling below the mid-0.6200s.
This movement is primarily driven by escalating trade tensions and heightened expectations of interest rate cuts by the Reserve Bank of Australia (RBA).
President Donald Trump's recent announcement of a 10% tariff on all imports, with higher rates for key partners like the EU (20%) and Japan (24%), has intensified fears of a global trade war and potential economic slowdown.
Reuters
Market Reaction and Currency Depreciation:
In response to these developments, the AUD/USD pair has declined, trading below the mid-0.6200s. The market's risk-off sentiment has led investors to seek safer assets, further pressuring the AUD.
The economic uncertainty stemming from trade tensions has led investors to anticipate that the RBA may implement interest rate cuts to support the Australian economy.
ANZ now forecasts possible cuts in May, July, and August, potentially reducing mortgage repayments by up to $269 monthly.
