Australian Dollar Recovers as US Dollar Pulls Back Ahead of US GDP Report

Australian Dollar Recovers as US Dollar Trims Gains Ahead of Q1 GDP Data

The Australian Dollar (AUD) bounced back during Thursday’s European session, with AUD/USD recovering losses as the US Dollar (USD) trimmed gains. The move comes ahead of the much-anticipated US Q1 GDP Annualized report.

US Court Blocks Trump’s Tariffs

A key development supporting the AUD was a US federal court’s ruling blocking President Donald Trump’s proposed "Liberation Day" tariffs. The court determined that Trump overstepped his legal authority, lifting pressure off global risk sentiment.

Weak Australian Capital Expenditure Data

Despite the currency's rebound, domestic data was not supportive. Australia’s Private Capital Expenditure fell by 0.1% in Q1, missing expectations for a 0.5% rise. The data reflects subdued business investment, which could limit further AUD gains.

China Tensions and Their Impact on AUD

The Trump administration’s halt on exports of advanced technologies to China—seen as retaliation for Chinese mineral export restrictions—could affect AUD negatively, as Australia is a key trade partner of China.

RBA Outlook Remains Dovish

The Reserve Bank of Australia (RBA) continues to monitor inflation and growth closely. Governor Michele Bullock signaled readiness to adjust policy if the economic outlook worsens, opening the door to future rate cuts.