The Australian dollar slipped slightly on Monday, as renewed optimism over global trade lifted the US dollar, drawing capital toward safer and higher-yielding assets. The aussie edged lower despite improved risk sentiment, suggesting the greenback’s strength remains a dominant force in currency markets.
Market sentiment brightened following signs of progress in international trade discussions, particularly between the US and China, easing concerns about global supply chains. While the Australian dollar typically benefits from stronger trade prospects, the broader rally in the US dollar overshadowed those gains.
AUD/USD 1-D Chart as of April 29th, 2025 (Source:TradingView)
Analysts noted that the aussie often performs well in risk-on environments, but this time, “the dollar’s resurgence is capping any upside,” one strategist said. The currency hovered just below 0.6480 against the greenback, marking a modest decline from last week’s levels.
Recent US economic data has continued to beat expectations, adding to speculation that the Federal Reserve may keep interest rates elevated for longer. That outlook has made the US dollar increasingly attractive, especially as other major central banks approach a pause or cut cycle.
Meanwhile, Australia’s domestic data has done little to counteract the external pressures. Signs of slowing consumer spending and softer commodity prices have limited support for the local currency, even as global risk sentiment improves.
Traders are now eyeing upcoming US inflation data and speeches from Federal Reserve officials, which could shape the next move in currency markets. Until then, the Australian dollar may remain under pressure as the US dollar maintains the upper hand.
