The Australian dollar rose in Asian trade on Thursday against its US counterpart for the second straight session as it recovers from five-year lows on activer short-covering.
It comes amid strong positive sentiment with global stocks rebounding after US President Donald Trump froze most tariffs on other countries.
Markets are now hoping for better tariff terms that would avoid destructive results and recession, with the pressure on global central banks receding as well.
The Price
The AUD/USD price rose 0.4% to $0.6178, with a session-low at $0.6116.
The pair rallied 3.3% on Wednesday, the first profit in four days, and the biggest one day profit since May 2010.
US Pauses Tariffs
In a stunning reversal, US President Trump paused reciprocal tariffs on dozens of countries for 90 days.
US Treasury Secretary Bessent described the step as a “strategic victory” for Trump, while managing to bolster his negotiating stance against other countries.
Bessent revealed plans to conduct talks with officials from Vietnam, Japan, India, and South Korea, and he expected these countries to provide “the best deals” for the US.
Global Markets
Global markets registered gigantic gains after the pause in tariffs, with S&P 500 rallying 9.5%, marking its best profit since 2008, while Dow Jones rose 3000 points, as NASDAQ gained over 2000 points.
Australian Rates
As recession concerns declined, the odds of a Reserve Bank of Australia 0.25% rate cut in May 2025 fell from 90% to 60%.
