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AUD/USD Price Forecast: Peaks at 0.6465 Amid Positive Australian PMI and Eased Geopolitical Tensions

During the early European trading session, the AUD/USD currency pair remained on an upward trajectory, sustaining a level around 0.6450 and peaking at 0.6465.

AUD/US Price Chart - Source: Tradingview

This rise was propelled by positive data from Australia’s Judo Bank Purchasing Managers Index (PMI) released on Tuesday, which highlighted robust expansion in the private sector, favorable for the Australian Dollar. Additionally, easing geopolitical tensions in the Middle East have bolstered risk-on market sentiment, further lifting the AUD/USD pair.

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Impact of Australian Economic Indicators on AUD/USD Price

The Australian economic landscape showed mixed signals; the Composite PMI for April soared to a 24-month peak of 53.6, reflecting significant private sector growth, predominantly in services. However, while the Manufacturing PMI edged up, it remained just shy of the growth threshold at 49.9. Conversely, a slight retreat in the Services PMI to 54.2 alongside a drop in the ANZ-Roy Morgan Australian Consumer Confidence Index to a year-low of 80.3 slightly dampened the upbeat outlook. These dynamics collectively supported the AUD against the USD, though gains were moderated by the dip in service sector momentum and waning consumer confidence.

China’s Economic Policy Adjustments Affecting Australia

The economic policy adjustments in China, including potential reductions in the Medium-term Lending Facility (MLF) rates to lower funding costs, are particularly relevant for Australia given their strong bilateral trade ties. Moreover, China maintaining its Loan Prime Rate (LPR) at 3.45% and the new tariffs on certain U.S. imports underscore the complex interdependencies affecting the Australian market.

Easing Middle East Tensions Enhance Risk Appetite

The de-escalation of Middle East tensions has positively influenced market sentiment, enhancing the appeal of riskier assets such as the Australian dollar. Iran’s restraint in not escalating conflict with Israel has improved global risk appetite, impacting commodities and influencing the AUD/USD trading dynamics favorably.

AUD/USD Price Forecast Amid US Dollar Strength

On the US side, robust job data, higher consumer inflation, and steadfast Federal Reserve policies have fortified the US dollar, tempering expectations for rate cuts. The anticipation of more conservative rate reductions by the Fed has also supported the dollar, impacting the AUD/USD exchange rate.

AUD/USD Price Chart

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Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics. His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker. His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
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