Australia’s economy is showing signs of improved growth.

The Australian dollar strengthened again after the U.S. dollar weakened, a result of President Donald Trump’s strict tariff policies, which sparked concerns about a potential U.S. economic recession. This, in turn, could lead the Federal Reserve to further cut interest rates. Meanwhile, Australia is facing a minimum 10% tariff, while Trump has confirmed that he will impose a 104% tariff on Chinese imports as the trade war between the world’s two largest economies intensifies. Markets remain hopeful that Trump will be open to negotiations to ease global trade tensions.

The Reserve Bank of Australia (RBA) kept its interest rate steady at 4.1% during its April meeting, marking another pause following a 25 basis points cut in February, which was in line with market expectations. The Board stated that monetary policy is appropriately positioned and is significantly impacting Australia’s economic activity and inflation. The central bank expressed confidence that inflation will sustainably return to the 2–3% target range, as higher interest rates help balance supply and demand. However, the RBA also emphasized the uncertain economic outlook for both domestic activity and global inflation, driven by geopolitical uncertainties and U.S. tariff policies.

Australia’s manufacturing PMI surged to 52.1 in March from 50.4 in February, supported by the strongest growth in production and new orders in over two years, fueled by an improving domestic economy, marketing efforts, and rising demand. However, export orders declined amid weaker external demand. The increase in business activity also led to higher employment, with job creation reaching the highest level in two years, reflecting manufacturers’ confidence in future sales despite concerns over U.S. tariffs.

Meanwhile, the services PMI rose to 51.6 in March 2025 from 50.8 in February, marking a seven-month high. This significant increase was driven by a sharp rise in new business, which expanded at the fastest pace in nearly three years, supported by improved economic conditions and heightened customer interest. However, export business saw a slight decline, mainly due to disruptions from Cyclone Alfred and impacts on tourism. Employment continued to rise, although overall business confidence weakened due to geopolitical concerns.

Australia’s 10-year government bond yields jumped to 4.35%, following the rise in U.S. Treasury yields, despite growing concerns that President Donald Trump’s tariffs could push the economy into a recession and force the Federal Reserve to cut rates further. Although the U.S. signaled a willingness to negotiate with trade allies, Trump stressed that there would be no halt to the major tariffs currently in place. Meanwhile, recent domestic data revealed that both business and consumer confidence remained sluggish, reflecting worries about economic weakness and increasing concerns over global growth following the impact of U.S. tariffs.

Techical analysis data (5H)

Resistance: 1.657, 1.662, 1.6646

Source: Investing.com

Buy/Long 1: If the price touches support in the price range of 1.647 - 1.6495 but cannot break the support at 1.6495, you may set a TP at approximately 1.662 and SL at around 1.6419 or according to your acceptable risk.

Buy/Long 2: If the price breaks the resistance in the price range of 1.657 - 1.662, you may set a TP at approximately 1.6646 and SL at around 1.647 or according to your acceptable risk.

Sell/Short 1: If the price touches resistance in the price range of 1.657 - 1.662 but cannot break the resistance at 1.657, you may set a TP at approximately 1.647 and SL at around 1.6646 or according to your acceptable risk.

Sell/Short 2: If the price breaks the support in the price range of 1.647 - 1.6495, you may set a TP at approximately 1.6419 and SL at around 1.662 or according to your acceptable risk.

Pivot point April 9, 2025 09:10 PM. GMT+7