AUD\/USD traded near 0.7125 on Tuesday, up 0.70% on the day and rising for a third session. The move was supported by a softer US Dollar and expectations around Australian monetary policy.<\/p>\n
China\u2019s February trade surplus was $213.62B, above forecasts of $179.6B and the prior $114.1B. In yuan terms, the surplus was CNY 1,500B versus a revised CNY 808.55B previously and a forecast of CNY 950B.<\/p>\n
In Australia, Westpac Consumer Confidence rose 1.2% in March after two monthly falls. NAB Business Confidence slipped to -1 in February from 4, while Business Conditions held at 7.<\/p>\n
Australia\u2019s 10-year government bond yield rose to about 5%, the highest since July 2011. Middle East tensions lifted energy prices and inflation concerns, with the RBA saying it is \u201cvery alert\u201d to risks to inflation expectations.<\/p>\n
The US Dollar eased as safe-haven demand reduced after comments that the Iran conflict could end \u201cvery soon\u201d. Markets are watching upcoming US CPI and PCE inflation data.<\/p>\n
Market pricing implies about a 55% chance of a 25-basis-point RBA rise on 17 March. A move above 0.7150 would mark a break beyond the year\u2019s high.<\/p>\n
We recall a similar setup around this time in March 2025, when the Aussie dollar showed strength near 0.7125 against a softening US dollar. This move was driven by expectations of a hawkish Reserve Bank of Australia, creating a favorable interest rate outlook for the AUD. The market was intently focused on the RBA’s upcoming policy decision.<\/p>\n
The RBA’s inflation concerns at that time, which pushed Australian 10-year bond yields to around 5%, proved to be well-founded. We now know that Australia’s Trimmed Mean CPI for the fourth quarter of 2025 registered a persistent 3.8%, justifying the central bank\u2019s vigilant stance. This backdrop of sticky inflation eventually led the RBA to deliver another rate hike in November 2025.<\/p>\n
On the other side of the equation, the US dollar’s weakness in early 2025 was tied to hopes for geopolitical de-escalation, but traders were cautiously awaiting key inflation data. This theme remains relevant, as the most recent US Core CPI for January 2026 came in at 3.9%, reminding us that the inflation battle is ongoing. Derivative traders should therefore anticipate volatility around upcoming inflation releases.<\/p>\n
With the AUD\/USD pair testing the key 0.7150 resistance level in that 2025 scenario, buying short-dated call options would be a logical strategy. This allows for participation in a potential upside break following the RBA meeting while strictly defining risk in case of a surprise dovish turn. Looking back, we know the pair struggled to sustain gains above 0.7200 through mid-2025, which underscores the value of using defined-risk option structures.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" AUD\/USD rose to 0.7125 as USD softened; China surplus surged; RBA hike odds rose; yields hit 5%.<\/p>\n","protected":false},"author":103,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-51142","post","type-post","status-publish","format-standard","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/51142","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/103"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=51142"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/51142\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=51142"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=51142"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=51142"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}