AUDUSD - Trump continues to influence the dollar!The AUDUSD currency pair is located between EMA200 and EMA50 in the 4H timeframe and is moving in its downward channel. In case of an upward correction due to the release of economic data this week, we can see the supply zone and sell within those limits with the appropriate risk reward. As long as the drawn upward trend line is maintained, the target of this corrective movement will be the ceiling of the descending channel.
The recent U.S. elections have sparked two contrasting narratives about the country’s economic future. One emphasizes economic growth through tax and regulatory cuts, while the other highlights downside risks stemming from tariffs and overall policy uncertainty. However, the business cycle’s strong performance to date remains a key consideration.
Forecasts suggest that U.S. economic growth will slightly slow to 2% in 2025, with unemployment rising modestly to 4.5%. Additionally, the Core Personal Consumption Expenditures (Core PCE) index is expected to decrease by 0.5% next year, settling at 2.3%. The Federal Reserve is likely to cut interest rates by 25 basis points in December and reduce them further to 3.75% by the end of Q3 2025.
On the trade policy front, significant tariff increases on China are anticipated, though no major changes are expected elsewhere. These tariffs could reduce trade volumes and raise import prices.
According to a recent Federal Reserve Bank of New York report, credit application rejection rates in 2024 are projected to be significantly higher than in 2019. The report also indicates that households are expected to be less inclined to apply for credit next year. Rejection rates for mortgage refinancing and auto loans have reached record highs in the survey’s history. Furthermore, the share of Americans refraining from applying for credit due to discouragement is on the rise.
Meanwhile, Goldman Sachs has revised its 2025 economic growth forecast for Australia downward, citing potential negative spillovers from the expected increase in U.S. tariffs on China. In its 2025 Australia and New Zealand Outlook report, Goldman now predicts a 1.8% rise in Australia’s GDP for next year, down from its earlier 2% forecast. This adjustment reflects the anticipated impact of tariffs on Australia’s exports, given that China is its largest trading partner.
President-elect Donald Trump has threatened to impose a 60% tariff on Chinese exports, aiming to protect American businesses and jobs.
In response, Chinese President Xi Jinping has remarked that China-Australia relations have maintained a positive trajectory of growth. He emphasized the need for enhanced coordination and cooperation between the two nations, stating that there are no fundamental conflicts of interest between them. Xi also called on Australia to create fairer trade conditions, announcing China’s readiness to increase imports of high-quality Australian products and encourage Chinese companies to invest in the country.
