The Australian dollar experienced its most significant rise since the Global Financial Crisis, notably strengthening against the US dollar. This surge followed US President Donald Trump’s declaration of a 90-day suspension on tariffs impacting most countries entering the US.
Despite this breakthrough, heavy tariffs on China continue to affect trade. The Australian dollar reached a high of US61.75 cents overnight but settled at US61.36 cents early the following day. Market reactions indicated that the global economy was pushing back against Trump’s tariffs, suggesting that the President was feeling the pressure from market forces.
By early afternoon, Trump communicated via Truth Social that more than 75 countries had approached the US for trade discussions without imposing significant retaliatory measures. In his announcement, he stated, “I have authorised a 90-day PAUSE, and a substantially lowered Reciprocal Tariff during this period, of 10 per cent, also effective immediately.”
In a press conference thereafter, Trump explained his decision to roll back several tariffs—excluding those on China—stating that the public reaction had been anxious in light of stock market fluctuations. He expressed optimism about reaching agreements but cautioned that “nothing’s over yet.”
In summary, while the Australian dollar basked in newfound strength, the landscape of international trade remains tense, particularly concerning China. President Trump’s attempts to alleviate global trade tensions reflect both market dynamics and ongoing economic challenges.