The Australian Dollar proved impressively resilient against the US Dollar in Asian trade on Wednesday, pushing above 0.6350. The currency closed trading on Friday 0.10% in the black, and has continued that performance today. This increase is a result of encouraging economic signals coming from China and positive broader market fundamentals.
After several months of unexpected resilience, China’s economy expanded at an annual rate of 5.4% in the first quarter of 2025. That rapid growth rate blew past both government and private-sector expectations, as analysts had been expecting just a 5.1% expansion. China’s Gross Domestic Product (GDP) is finally starting to stop setting the economic world on fire. It saw a 1.2% increase over last quarter, following a gain of 1.6% last quarter—indicating a solid path of recovery.
China’s retail sales jumped by 5.9% in March. This exceptional growth far surpassed the expected 4.2%, fuelling the positive GDP growth momentum with even more optimism. This impressive growth in consumer spending indicates improved consumer confidence among Chinese consumers and further underscores the opportunity for continued positive economic momentum. China’s industrial production surprising on the upside in March with a stellar 7.7%. Analysts had expected an increase of just 5.6%, and the prior print for February was 5.9%.
Positive economic data printing out of China has provided a tailwind for the Australian Dollar. At the same time, other several external factors have greatly influenced currency markets. This uncertainty has brought about a safe-haven demand for the Australian Dollar in response to President Donald Trump’s tariff plans. Moreover, buoying AUD’s position has been the US Dollar’s significant softness.
According to market analysts, anticipation of additional easing from the Federal Reserve has aided the strength of the Australian Dollar. Investors are eagerly looking to see if the United States follows suit with supportive policies. In return, they are more and more pouring into imperial safe currencies such as the Australian Dollar.