The Australian dollar (AUD) rose for the second consecutive trading day on Tuesday. However, AUD/USD is facing downward pressure due to the strengthening of the US dollar (USD). Strong S&P Global Services Purchasing Managers’ Index (PMI) data and cautious Federal Reserve comments may have driven the dollar’s gains.
The Australian dollar found support as investors expected the Reserve Bank of Australia (RBA) to keep interest rates unchanged in April after cutting rates in February for the first time in four years. Additionally, expectations of Chinese stimulus measures continue to support the Australian economy given the strong trade relationship between the two countries.
Nonetheless, the risk-sensitive AUD/USD pair could face potential resistance as traders remain cautious ahead of Trump’s tariff announcement scheduled for April 2. While Trump has suggested “a lot” of countries could be exempted, details of his administration’s tariff plans remain vague.
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