AUD/USD Advances as Trump Replaces his National Security Adviser
The Australian Dollar US Dollar (AUD/USD) exchange rate was able to trend higher by the start of the European session as a rise in political uncertainty pressured the ‘greenback’.
At the time of writing AUD/USD is up by around 0.2%, helping the pairing recoup some of Thursday’s losses.
US Dollar (USD) Weakened by Further Political Uncertainty in Washington
The US Dollar found itself trending lower against the Australian Dollar during the European session on Friday as investors remained unsettled by the latest shake up in the White House.
This came after President Trump announced on Thursday that he was replacing his US National Security Adviser HR McMaster, with former UN ambassador John Bolton.
The move came as little surprise to observers after rumours began to circulate last week that McMaster would be ousted over his opposition to Trump’s blanket steel tariffs.
Bolton will be Trump’s third national security chief since assuming office, something that many critics suggest is evidence of a fractured White House and has led to another rise in political uncertainty.
Analysts also suggest that as a known policy hawk Bolton is more likely to get behind the president in his plans to pursue a more protectionist policy agenda, prompting further concerns about the US sparking a global trade war.
Australian Dollar (AUD) Climbs as Australia Wins US Tariff Reprieve
Meanwhile the Australian Dollar is edging higher following the news that a number of US trading partners, including Australia would be suspended from Trump’s steel tariffs.
The announcement came as part of Trump’s announcement of $50bn worth of tariffs against imports from China.
However with the reprieve only lasting until the start of May amid ongoing discussions, analysts warn that it may be too early to rejoice, especially if the new tariffs on China leads to a trade war between the world’s two largest economies.
AUD/USD Forecast: US Consumer Sentiment to Slide?
Looking ahead the AUD/USD exchange rate could fall back again at the very end of this week’s session as the US publishes its latest durable goods orders figures.
Economists forecast that Friday’s data will show that order growth will rebound from -3.7% to 1.5% in February, likely helping to strengthen the US Dollar.
Meanwhile looking ahead to next week’s session a lull in domestic data may weaken the Australian Dollar as it is left vulnerable to further trade tension and the possibility of an additional decline in commodity prices.