THE month July 8, 2025, the key Australian economic events
2:30 AM WAT – NAB Business Confidence
Actual: 5
Forecast: 2
The NAB Business Confidence Index rose sharply to 5 in June 2025 from 2 in May, marking its highest level since January and indicating improving business sentiment. This improvement was driven by gains in sales, profitability, and employment, signaling optimism about the economic outlook despite some lingering cost pressures.
5:30 AM WAT – RBA Cash Rate and Related Announcements
Cash Rate Actual: 3.85% (no cut at this meeting)
Forecast: 3.60% (markets had expected a 25 bps cut)
Previous: 3.85%
The Reserve Bank of Australia (RBA) held the cash rate steady at 3.85%, surprising markets that had expected a cut to 3.60%. The RBA Rate Statement accompanied the decision, providing insights into the bank’s view on inflation, growth, and monetary policy. The decision reflects the RBA’s cautious stance amid mixed economic signals and ongoing inflation concerns.
The stronger business confidence contrasted with the RBA’s decision to pause rate cuts, highlighting uncertainty about the economic outlook and inflation trajectory in Australia.
AU10Y=ROSE TO 4.3% FROM DAILY OPEN OF 4.206%
AUD OCR=3.85% THE SAME
US10Y=4.391%
US IRT=4.25-4.5%
This shift in AU1OY and RATE hold of 3.85% will give AUD a buy opportunity going forward.
while we are seeing tariff related shocks evident ,AUSTRALIA a commodities dependent economy will take a offensive .
The announcement and implementation of tariffs have created uncertainty, causing the AUD to decline from recent highs. The AUD/USD pair dropped in anticipation of tariff changes and broader risk aversion in global markets.
Market Sentiment:
The threat of higher tariffs and trade tensions typically weighs on the AUD, as Australia’s economy is highly exposed to global trade flows. Increased tariffs can reduce export competitiveness and hurt terms of trade, especially if global growth slows as a result.
Limited Direct Impact:
since the US is not Australia’s largest export market. However, indirect effects—such as slower global growth or disruptions in China (Australia’s biggest trading partner)—could further pressure the AUD.
Broader Economic and Policy Context
RBA Response:
The Reserve Bank of Australia (RBA) has cited tariff uncertainty as a reason for holding interest rates steady, adopting a “wait-and-see” approach until the full effects of global trade tensions are clearer.
Exchange Rate as Shock Absorber:
The AUD often acts as a buffer during global shocks. If tariffs or trade tensions worsen, a weaker AUD can help offset some of the negative effects by making Australian exports more competitive, but it also increases the cost of imports.
Key Takeaways
Tariff uncertainty has already contributed to recent AUD weakness.
If trade tensions escalate or global growth slows, the AUD could face further downside.
The RBA is likely to remain cautious, and the AUD will remain sensitive to both tariff developments and broader economic data.
#AUDUSD
2:30 AM WAT – NAB Business Confidence
Actual: 5
Forecast: 2
The NAB Business Confidence Index rose sharply to 5 in June 2025 from 2 in May, marking its highest level since January and indicating improving business sentiment. This improvement was driven by gains in sales, profitability, and employment, signaling optimism about the economic outlook despite some lingering cost pressures.
5:30 AM WAT – RBA Cash Rate and Related Announcements
Cash Rate Actual: 3.85% (no cut at this meeting)
Forecast: 3.60% (markets had expected a 25 bps cut)
Previous: 3.85%
The Reserve Bank of Australia (RBA) held the cash rate steady at 3.85%, surprising markets that had expected a cut to 3.60%. The RBA Rate Statement accompanied the decision, providing insights into the bank’s view on inflation, growth, and monetary policy. The decision reflects the RBA’s cautious stance amid mixed economic signals and ongoing inflation concerns.
The stronger business confidence contrasted with the RBA’s decision to pause rate cuts, highlighting uncertainty about the economic outlook and inflation trajectory in Australia.
AU10Y=ROSE TO 4.3% FROM DAILY OPEN OF 4.206%
AUD OCR=3.85% THE SAME
US10Y=4.391%
US IRT=4.25-4.5%
This shift in AU1OY and RATE hold of 3.85% will give AUD a buy opportunity going forward.
while we are seeing tariff related shocks evident ,AUSTRALIA a commodities dependent economy will take a offensive .
The announcement and implementation of tariffs have created uncertainty, causing the AUD to decline from recent highs. The AUD/USD pair dropped in anticipation of tariff changes and broader risk aversion in global markets.
Market Sentiment:
The threat of higher tariffs and trade tensions typically weighs on the AUD, as Australia’s economy is highly exposed to global trade flows. Increased tariffs can reduce export competitiveness and hurt terms of trade, especially if global growth slows as a result.
Limited Direct Impact:
since the US is not Australia’s largest export market. However, indirect effects—such as slower global growth or disruptions in China (Australia’s biggest trading partner)—could further pressure the AUD.
Broader Economic and Policy Context
RBA Response:
The Reserve Bank of Australia (RBA) has cited tariff uncertainty as a reason for holding interest rates steady, adopting a “wait-and-see” approach until the full effects of global trade tensions are clearer.
Exchange Rate as Shock Absorber:
The AUD often acts as a buffer during global shocks. If tariffs or trade tensions worsen, a weaker AUD can help offset some of the negative effects by making Australian exports more competitive, but it also increases the cost of imports.
Key Takeaways
Tariff uncertainty has already contributed to recent AUD weakness.
If trade tensions escalate or global growth slows, the AUD could face further downside.
The RBA is likely to remain cautious, and the AUD will remain sensitive to both tariff developments and broader economic data.
#AUDUSD
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.