Australia's economy has shown slight growth.

The Australian dollar remained relatively stable following a period of significant volatility. Investors continue to closely monitor the rapidly changing global trade environment, leading to mixed market sentiment. This comes after reports that the Trump administration is considering reducing tariffs on Chinese imports, depending on the outcome of trade negotiations. Meanwhile, China has signaled openness to talks if the U.S. halts further threats. However, U.S. Treasury Secretary Scott Bessent stated that the negotiations will not involve unilateral tariff reductions.

Australia’s Manufacturing PMI fell to a two-month low of 51.7 in April, down from 52.1 in March. Despite this, manufacturing output continued to expand due to a slight increase in new orders. Meanwhile, growth among new businesses remains driven primarily by domestic demand, as export orders declined for the second consecutive month amid tariff-related uncertainties. Employment levels have remained steady, although production costs have increased due to higher expenses for materials, energy, and labor, leading to a slowdown in overall business confidence.

Australia’s leading economic index declined by 0.1% month-on-month in March, while the growth forecast for the next six months fell to 0.6%, down from 0.9% in February. The latest data suggests that the economy is beginning to feel the impact of escalating trade policy disruptions following President Trump’s announcement of global tariffs. GDP growth is now expected to slow to around 1.9% year-on-year, down from the earlier forecast of 2.2%. Matthew Hassan, Head of Macroeconomic Forecasting for Australia, noted that a weaker external environment and persistently low domestic inflation may prompt the Reserve Bank of Australia (RBA) to cut interest rates by another 25 basis points at its May meeting.

The Reserve Bank of Australia has yet to determine the timing of its next interest rate adjustment. The board has emphasized the need to remain vigilant amid shifting global economic data and risks, as highlighted in the April meeting minutes. The central bank held the interest rate at 4.35%, noting that inflation continues to decline while the labor market remains tight. At the same time, the overall economic outlook remains in line with previous forecasts.

The board stressed several ongoing risks, including the possibility that domestic demand and wage growth could push inflation higher. Conversely, a weakening labor market or sluggish consumer spending could lead to deflationary pressure, further suppressing inflation. Additionally, rising global risks stemming from trade policy uncertainty continue to directly influence potential rate cuts.

The yield on Australia’s 10-year government bonds has remained stable at around 4.23%, amid growing optimism about easing U.S.-China trade tensions, which directly affects Australian bond yields due to the country’s strong trade ties with both nations. Meanwhile, investors expect the Reserve Bank of Australia to cut interest rates by another 25 basis points in May, and forecast rates to fall to around 3.0% by the end of the year.

Techical analysis data (5H)

Resistance: 1.5685, 1.5704, 1.5732

Source: Investing.com

Buy/Long 1: If the price touches support in the price range of 1.561 - 1.5637 but cannot break the support at 1.5637, you may set a TP at approximately 1.5704 and SL at around 1.559 or according to your acceptable risk.

Buy/Long 2: If the price breaks the resistance in the price range of 1.5685 - 1.5704, you may set a TP at approximately 1.5732 and SL at around 1.561 or according to your acceptable risk.

Sell/Short 1: If the price touches resistance in the price range of 1.5685 - 1.5704 but cannot break the resistance at 1.5685, you may set a TP at approximately 1.561 and SL at around 1.5732 or according to your acceptable risk.

Sell/Short 2: If the price breaks the support in the price range of 1.561 - 1.5637, you may set a TP at approximately 1.559 and SL at around 1.5704 or according to your acceptable risk.

Pivot point April 24, 2025 09:10 PM. GMT+7