The Australian dollar remained under significant pressure, trading below $0.65 on Tuesday, as US President-elect Donald Trump threatened to impose an additional 10% tariff on China.
Aussie dollar struggles below $0.65
This sparked increased demand for the US dollar while putting downward pressure on risk-sensitive currencies. Given Australia's heavy reliance on exports to China, the country is particularly exposed to the ongoing US-China trade tensions. The Aussie dollar is also often viewed as a liquid proxy for the Chinese yuan. Domestically, investors are closely monitoring upcoming inflation data, which will provide important insights into the Reserve Bank of Australia's future monetary policy.
RBA may maintain its policy
In its latest meeting minutes, the RBA indicated it would maintain a restrictive stance until there is clear evidence that inflation is moving sustainably toward its target, while noting that any future adjustments would depend on incoming economic data.
