Australian Dollar Slips as Trump Threatens Tariffs on BRICS Nations

The Australian Dollar (AUD) extended its losses against the US Dollar (USD) on Monday, marking a third consecutive day of decline amid rising concerns over renewed US tariffs. The AUD/USD pair traded around 0.6530, pressured by market jitters surrounding President Trump’s tariff threats targeting countries aligned with BRICS.

Trump announced via social media that any country siding with BRICS policies would face an additional 10% tariff, with no exceptions. He’s expected to issue 12 to 15 tariff-related letters soon, aiming to finalize trade agreements by July 9. These developments weigh heavily on global risk sentiment, hurting trade-sensitive currencies like the Aussie.

US Dollar Gains on Tariff News and Robust Jobs Data

The US Dollar Index (DXY) hovered near 97.00, bolstered by trade tensions and strong labor market data. US Nonfarm Payrolls rose by 147,000 in June, beating the 110,000 forecast. Unemployment fell to 4.1%, while weekly jobless claims dipped to 233,000—further evidence of labor market strength.

On the other hand, private-sector payrolls dropped by 33,000 in June, marking the first decline in over two years. Despite this, the overall data continues to support a resilient US economy and delays in potential Fed rate cuts.

Australia Data: ANZ Job Ads Rise, But Trade Weakens

Australia’s ANZ Job Advertisements rebounded 1.8% in June after falling 1.2% in May, indicating mild labor market strength. However, the Australian Bureau of Statistics reported a sharp drop in the May trade surplus to AUD 2.24 billion, missing expectations of AUD 5.09 billion. Exports fell 2.7%, while imports rose 3.8%, further adding to the AUD’s bearish tone.

China, Australia’s key trade partner, is also in focus. A Financial Times report revealed a 43% drop in Chinese exports directly to the US, with exports rerouted through Southeast Asia to avoid tariffs. This strategy has prompted Washington to impose a 40% tariff on goods trans-shipped via Vietnam.

Traders Eye RBA Rate Decision

Attention now turns to Tuesday’s Reserve Bank of Australia (RBA) meeting. Markets broadly expect a 25 basis point cut, which would bring the cash rate to 3.60%. A Reuters poll shows further easing may follow, with rates potentially dropping to 3.10% by year-end.

AUD/USD Technical Outlook: Bias Weakens Below 9-Day EMA

Technically, AUD/USD continues to trade within an ascending channel, but short-term momentum has weakened. The pair sits below the nine-day Exponential Moving Average (EMA) at 0.6546, with the Relative Strength Index (RSI) holding slightly above 50, indicating fading bullish strength.

• Immediate Resistance: 0.6546 (9-day EMA)
• Major Resistance: 0.6590 (8-month high), followed by 0.6670 (upper channel)
• Support Levels: 0.6500 (channel support), followed by 0.6472 (50-day EMA)

A break below the 0.6500 support could confirm further downside, especially if trade tensions escalate or the RBA adopts a more dovish tone than expected.

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