The Australian dollar rose in Asian trade on Thursday against its US  counterpart for the second straight session as it recovers from five-year lows on activer short-covering.

It comes amid strong positive sentiment with global stocks rebounding after US President Donald Trump froze most tariffs on other countries. 

Markets are now hoping for better tariff terms that would avoid destructive results  and recession, with the pressure on global central banks receding as well.

The Price

The AUD/USD price rose 0.4% to $0.6178, with a session-low at $0.6116.

The pair rallied 3.3% on Wednesday, the first profit in four days, and the biggest one day profit since May 2010.

US Pauses Tariffs

In a stunning reversal, US President Trump paused reciprocal tariffs on dozens of countries for 90 days.

US Treasury Secretary Bessent described the step as a “strategic victory” for Trump, while managing to bolster his negotiating stance against other countries.

Bessent revealed plans to conduct talks with officials from Vietnam, Japan, India, and South Korea, and he expected these countries to provide “the best deals” for the US.

Global Markets

Global markets registered gigantic gains after the pause in tariffs, with S&P 500 rallying 9.5%, marking its best profit since 2008, while Dow Jones rose 3000 points, as NASDAQ gained over 2000 points.

Australian Rates

As recession concerns declined, the odds of a Reserve Bank of Australia 0.25% rate cut in May 2025 fell from 90% to 60%.

US stock indices spiked and achieved historic gains after US President Donald Trump calmed the markets somewhat on the trade war. 

US President Donald Trump escalated the devastating trade war with China by announcing 125% tariffs on Chinese products.

The tariffs will be immediate and are a response to China's disrespect to global markets as Trump described it.

Simultaneously, Trump announced a 90-day hold on tariffs for most other countries .

The Chinese government announced fresh retaliatory 84% tariffs on US products, deepening the trade war.

Separately, the Federal Open Market Committee’s meeting minutes showed all members  unanimously voted in favor of maintaining interest rates unchanged in March.

The minutes showed concerns about weaker growth due to higher tariffs, but increased spending in some economies reduced such concerns. 

Policymakers believe that high inflation could be more resistant than expected, with mounting market uncertainty due to weaker consumer spending and high tariffs.

On trading, Dow Jones closed up 7.9%, or 2963 points to 40,698 points, achieving its biggest daily profit ever.

S&P 500 rallied 9.5%, or 474 points to 5457 points.

NASDAQ spiked 12.2%, or 1857 points to 17,125  points, its biggest daily profit since 2008.

Gold prices surged on Wednesday despite the dollar’s modest gains against most major rivals, with wild gains in most assets following new developments in the trade war. 

US President Donald Trump escalated the devastating trade war with China by announcing 125% tariffs on Chinese products.

The tariffs will be immediate and are a response to China's disrespect to global markets as Trump described it.

Simultaneously, Trump announced a 90-day hold on tariffs for most other countries .

The Chinese government announced fresh retaliatory 84% tariffs on US products, deepening the trade war.

Separately, the Federal Open Market Committee’s meeting minutes showed all members  unanimously voted in favor of maintaining interest rates unchanged in March.

The minutes showed concerns about weaker growth due to higher tariffs, but increased spending in some economies reduced such concerns. 

Policymakers believe that high inflation could be more resistant than expected, with mounting market uncertainty due to weaker consumer spending and high tariffs.

Otherwise, the dollar index rose 0.1% as of 19:45 GMT to 103.07, with a session-high at 103.3, and a low at 101.8.

On trading, gold spot prices rose 4.2% as of 19:46 GMT, or $125 to $3115 an ounce.

US President Donald Trump escalated the devastating trade war with China by announcing 125% tariffs on Chinese products.

The tariffs will be immediate and are a response to China's disrespect to global markets as Trump described it.

Simultaneously, Trump announced a 90-day hold on tariffs for most for most other countries .

The Chinese government announced fresh retaliatory 84% tariffs on US products, deepening the trade war.