Skip to Content
News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.



Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Please try again
More View More
Australian Dollar Holds Gains Amid Budget, Ukraine War. Will RBA Push AUD/USD Higher?

Australian Dollar Holds Gains Amid Budget, Ukraine War. Will RBA Push AUD/USD Higher?

Daniel McCarthy, Strategist
What's on this page

Australian Dollar, AUD/USD, Ukraine, Budget, Election, RBA - Talking Points

  • The Australian Dollar could be at an inflection point post-budget
  • The RBA might be set for a May lift-off if CPI delivers upside surprise
  • Ukraine war an outlier for the Aussie. Can AUD/USD break higher?

Trade Smarter - Sign up for the DailyFX Newsletter

Receive timely and compelling market commentary from the DailyFX team

Subscribe to Newsletter

The Australian Dollar has been hovering around 75 cents for a week now, as geopolitical and fundamental drivers are unable to give clear direction.

The geopolitical landscape emanating out of the Ukraine war has added to positive investor sentiment in equities today, with Russia saying that they are open to negotiation for de-escalation.

Many observers are sceptical that this is a ploy by Putin to stall for time to re-position his military.

In any case, the development has not raised risk appetite in currency land.

On the fundamental side, the Australian government delivered their pre-election budget overnight, and there were few surprises.

The key points are:

  • A small temporary tax break for low and middle-income earners
  • Atemporary cut in the fuel excise taxes that equates to roughly a 10% reduction at the bowser
  • An increase in defence spending, particularly for cyber security
  • Infrastructure spending on roads, dams and airports
  • Some measures for first home buyers were also thrown in, but they are unlikely to have much impact.
  • Higher commodity prices improved the bottom line
  • A budget that is going to remain in deficit for the foreseeable future but is a low percentage of GDP compared to other G-20 nations.
  • AAA country credit rating intact
How to Trade AUD/USD
How to Trade AUD/USD
Recommended by Daniel McCarthy
How to Trade AUD/USD
Get My Guide

Overall, it has been perceived by the market as benignly positive, with the Australian Dollar showing little reaction. The implications of the budget might be felt down the track with the RBA’s interpretation of its’ possible impact on inflation.

The RBA could be mindful of the upcoming election, although this has not stopped them from moving rates in the past. Australians will be going to the polls before May 21st with the last day for the government to call the election being April 19th.

This brings into play the May RBA meeting for possible rate movement. The first quarter CPI report will be released 27th April and the central bank has previously said that they will wait for this data before hiking.

The market seems to be favouring June as the likely date for rate movement, but there have been significant price rises in many sectors year to date. The CPI number could be an uncomfortable outcome for an inflation-targeting central bank.

The take-out for the Australian Dollar is that the backdrop remains positive but that the good news could already be in the price for now. Without a move above the October 2021 high of 0.7556, the Aussie may have seen a short-term peak. A break above there could suggest that bullish momentum persists.



Chart created in TradingView

--- Written by Daniel McCarthy, Strategist for

To contact Daniel, use the comments section below or @DanMcCathyFX on Twitter

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.