Aussie dollar stabilizes amid rate cut and trade concerns

The Australian dollar remained steady around $0.622 on Friday. However, it was still headed for a significant weekly decline amid growing expectations that the Reserve Bank of Australia (RBA) will begin cutting interest rates in February.

Aussie dollar stabilizes amid rate cut and trade concerns

Recent data revealed that Australia's annual inflation rate eased to 2.4% in Q4, down from 2.8% in Q3, slightly under the 2.5% forecast. Producer inflation also softened to 3.7% in Q4, compared to 3.9% in Q3. As a result, markets are pricing in a 95% likelihood of a 25 basis point reduction in the cash rate, bringing it down to 4.35% at the RBA's meeting on February 18. The Aussie faced additional pressure from a stronger US dollar.

Trump's tariffs, China's struggles hit Aussie dollar

President Trump reiterated plans to impose 25% tariffs on imports from Mexico and Canada, with a 10% tariff on China still under consideration. Ongoing economic challenges in China, Australia's largest trading partner, further dampened sentiment, weighing on the local currency.