AUD/USD attracted buyers on Friday after President Trump suggested a trade agreement with China remains within reach, reinforcing a risk-on mood. The pair advances to 0.6315, heading for its first weekly gain in three weeks. Meanwhile, renewed speculation regarding additional Federal Reserve (Fed) rate cuts in 2025 continues to undermine the US Dollar, providing an added lift to the Aussie.

Daily digest market movers: Aussie continues its recovery as USD remains soft

• The Greenback falls to a one-month trough as markets price in the prospect of further Fed easing by year-end. In addition, President Trump’s statements about immediate interest rate cuts contribute to the latest downside in the USD.
• The Reserve Bank of Australia’s (RBA) possible rate cut in February and subdued economic growth might limit the Aussie’s upside.
• On the US front, the S&P Global Composite PMI decelerates to 52.4 from 55.4, with Manufacturing climbing to 50.1 and Services dipping to 52.8. Analysts note rising optimism in the manufacturing sector, expecting supportive policies under the Trump administration.
• The US President signals reluctance to levy tariffs on China, citing that a trade pact could be finalized. He also reiterates grievances about trade deficits with various nations, including Canada, while calling on OPEC to lower crude oil prices.

AUD/USD technical outlook: Short-term signals turn more upbeat, hinting at potential breakout

The AUD/USD has advanced to 0.6315 on Friday, extending its recent winning streak and edging closer to 0.6330. In the short term, technicals lean constructive: the Moving Average Convergence Divergence (MACD) histogram prints rising green bars, suggesting a budding shift toward bullish momentum. The Relative Strength Index (RSI) stands at 58 and is rising sharply, indicating robust upside pressure.

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