Notícias do Mercado
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23:50
Japan Machinery Orders (MoM) above forecasts (-0.4%) in November: Actual (3.4%)
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23:50
Japan Machinery Orders (YoY) above expectations (5.6%) in November: Actual (10.3%)
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23:23
AUD/USD holds below 0.6200 ahead of Trump’s inauguration
- AUD/USD softens to near 0.6190 in Monday’s early Asian session.
- The Fed is anticipated to hold rates steady in the January meeting.
- Trump’s tariff threat could put pressure on the Aussie.
The AUD/USD pair weakens to around 0.6190, snapping the two-day losing streak during the early Asian session on Monday. The markets turn cautious as President-elect Donald Trump will be inaugurated later on Monday. The US market is closed on Monday due to the Martin Luther King Day bank holiday.
Concerns around Trump's pledges, including tariffs, extending tax cuts, and deportations of illegal immigrants, have contributed to a rise in US Treasury yields and the Greenback before he takes office. Analysts believe that the US Federal Reserve (Fed) future interest rate path will depend on how aggressively the incoming Trump administration follows through on those pledges.
Investors will closely monitor Trump’s executive orders, which he plans to issue just hours after he is sworn into office. The Fed is expected to hold interest rates unchanged at its January meeting and resume the reductions in March, according to a slim majority of economists polled by Reuters.
The possibility of renewed trade tensions between the US and China and the potential of Trump's higher tariffs could exert some selling pressure on the Australian Dollar (AUD) as China is a major trading partner to Australia. However, the upbeat Chinese economic data on Friday could support the Australian Dollar (AUD). China’s economy grew 5.4% YoY in the fourth quarter (Q4) of 2024, compared to a 4.6% expansion in Q3. This reading came in stronger than the 5% expected by a wide margin.Australian Dollar FAQs
One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD.
The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive.
China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs.
Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD.
The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.
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22:44
US President-elect Trump to issue executive orders on immigration, energy, government hiring
President-elect Donald Trump could announce as many as 100 executive orders within hours of being sworn in as the 47th President. His executive authority on day one is to push forward his top priorities related to the border, energy, and government reform, per the Wall Street Journal.
According to Capitol Hill Republicans briefed on the call, Stephen Miller, Trump's incoming White House deputy chief of staff for policy, briefed a few key Republican leaders on the administration's intentions Sunday afternoon. They include declaring a national emergency on the US-Mexico border, rescinding Biden administration diversity, equity, and inclusion directives, and unwinding Biden's restrictions on offshore and federal land drilling.Market reaction
The US Dollar Index (DXY) is trading 0.02% higher on the day at 109.37 as of writing.
US Dollar FAQs
The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.
The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.
In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.
Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.
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