Key Moments
- AUD/USD trades near 0.7040 on Tuesday, down 0.20% after failing to sustain a move above 0.7100 on Monday.
- Australia’s January CPI is expected to show headline inflation at 3.7% YoY and Trimmed Mean at 3.3%, following a recent RBA hike to 3.85%.
- Renewed U.S. tariff threats under Section 122 are reviving trade concerns and pressuring risk-sensitive currencies such as the Australian Dollar.
Risk Appetite Cools as AUD/USD Retreats From Highs
AUD/USD is trading around 0.7040 on Tuesday at the time of writing, declining 0.20% on the session after failing to maintain levels above the key 0.7100 threshold on Monday. The pair is easing back from multi-month highs as investors pare risk positions ahead of several significant macroeconomic releases in Australia, China, and the United States.
Focus on Australian CPI After RBA’s Restrictive Shift
The primary domestic catalyst for the Australian Dollar this week is the release of Australia’s January Consumer Price Index (CPI) on Wednesday. Market expectations point to headline inflation rising 3.7% year-on-year, just below the prior 3.8%, while the Trimmed Mean gauge is projected to remain unchanged at 3.3%.
These data points follow the Reserve Bank of Australia’s recent decision to raise rates by 25 basis points, lifting the cash rate to 3.85%. Policymakers justified the move by citing ongoing inflation pressures and stronger-than-anticipated private demand, indicating that the central bank retains a restrictive stance if price growth does not moderate.
U.S. Tariff Headlines Add External Headwinds
On the U.S. side, the trade environment remains an important driver for currency markets. After the U.S. Supreme Court blocked certain earlier tariffs, President Donald Trump threatened to apply a new 15% global tariff under Section 122 of the Trade Act. This development has revived worries over a potential re-escalation of trade tensions.
Such concerns are weighing on cyclical and trade-sensitive currencies, including the Australian Dollar, which tends to be influenced by global trade dynamics and shifts in sentiment toward risk assets.
Outlook for AUD/USD Around the 0.7000 Level
With these opposing forces at play, AUD/USD sits at a critical juncture. A backdrop of potentially persistent monetary policy restraint in Australia contrasts with an external environment shaped by trade uncertainty and steady demand for the U.S. Dollar.
The upcoming Australian CPI figures may be pivotal in determining the next directional move. A firm or softer inflation print could influence whether the pair can consolidate above the 0.7000 handle or whether the current pullback from 0.7100 develops into a more extended consolidation phase.
Australian Dollar Performance Against Major Currencies
The following table summarizes the Australian Dollar’s percentage change versus major currencies today. According to the data, the Australian Dollar has been strongest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.11% | 0.03% | 0.78% | 0.07% | 0.21% | 0.08% | 0.01% | |
| EUR | -0.11% | -0.08% | 0.70% | -0.03% | 0.09% | -0.03% | -0.10% | |
| GBP | -0.03% | 0.08% | 0.78% | 0.04% | 0.18% | 0.06% | -0.01% | |
| JPY | -0.78% | -0.70% | -0.78% | -0.72% | -0.58% | -0.72% | -0.78% | |
| CAD | -0.07% | 0.03% | -0.04% | 0.72% | 0.14% | 0.02% | -0.06% | |
| AUD | -0.21% | -0.09% | -0.18% | 0.58% | -0.14% | -0.12% | -0.20% | |
| NZD | -0.08% | 0.03% | -0.06% | 0.72% | -0.02% | 0.12% | -0.07% | |
| CHF | -0.01% | 0.10% | 0.01% | 0.78% | 0.06% | 0.20% | 0.07% |
The heat map represents percentage moves of major currencies relative to one another. The base currency is selected from the left-hand column, and the quote currency from the top row. For instance, choosing the Australian Dollar in the left column and moving horizontally to the U.S. Dollar cell provides the percentage change for AUD (base)/USD (quote).
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