FX.co ★ Australian Dollar Falls on Greenback Strength

The Australian dollar dropped below $0.64 on Friday, marking its lowest point in a week due to the US dollar gaining strength. This shift came in response to improved global trade sentiment and reduced anticipation of imminent US interest rate cuts. The US dollar's rise was fueled by President Donald Trump's announcement of a preliminary trade agreement with the UK, the first significant development since the extensive US tariffs of the previous month. Trump also hinted at the possibility of additional agreements and suggested that tariff reductions on China could occur, depending on the outcomes of the upcoming high-level trade discussions in Switzerland. The Australian dollar also encountered challenges after Federal Reserve Chair Jerome Powell dismissed the notion of a precautionary rate cut, emphasizing continuing concerns about inflation and employment. On the domestic front, the Australian dollar is under additional pressure as the market adjusts to the likelihood of a 25 basis point rate reduction by the Reserve Bank of Australia at its May meeting, driven by indications of an economic slowdown and increasing external uncertainties.