The Australian Dollar (AUD) traded positive in the early hours of the Asian session on Tuesday (03/06), while the US Dollar (USD) remained pressured.
A series of events, including the re-escalation of tensions between the United States and China and the threat of new tariffs, have led to significant outflows from the USD, which has benefited other currencies, such as the Australian Dollar.
US President Trump, tariffs, and trade wars continue to drive sentiment and demand for the US Dollar.
US President Donald Trump recently announced that tariffs on steel and aluminum imports will double starting Wednesday. This announcement, along with disappointing economic data releases on Monday, has added further pressure on the Greenback.
A combination of rising geopolitical risks, a decline in the US Purchasing Managers' Index (PMI) reading for May, and a breakout of key technical resistance could continue to support the AUD/USD pair on Tuesday.
Markets started the week on a risk-off note on Monday, following several tweets from Trump accusing China of violating the interim trade agreement established on May 12. In the agreement, both countries committed to improving their trade relations. Furthermore, the announcement of additional tariffs on global steel and aluminum imports to the US had a positive impact on the AUD/USD pair, pushing it to a significant psychological resistance level of 0.6500.
Furthermore, the May ISM Manufacturing Purchasing Managers' Index (PMI), which measures the health of the US manufacturing sector, declined in May. The index missed analysts' estimates of 49.5, registering a reading of 48.5, indicating a weakening manufacturing sector. (alg)
Source: Fxstreet
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