The Australian dollar exhibited volatility on March 5 as investors reacted to US President Donald Trump's Congressional speech and key economic data releases.
The AUD/USD pair moved sideways, gaining ground as the US dollar remained under pressure due to concerns over slowing economic growth and the impact of recently imposed tariffs.
Australia's gross domestic product grew by 0.6% quarter-over-quarter in the fourth quarter of 2024, surpassing market expectations of 0.5% and improving from 0.3% in the previous quarter.
On an annual basis, GDP expanded by 1.3%, up from 0.8% in Q3 of 2024.
The data reinforced the resilience of the Australian economy despite global trade uncertainty.
Meanwhile, US Commerce Secretary Lutnick suggested that Trump may reconsider his tariff policy less than 48 hours after its implementation, adding to market uncertainty.
Reserve Bank of Australia Deputy Governor Andrew Hauser warned that heightened trade uncertainty, at a 50-year high, could lead businesses and households to delay investments, potentially impacting economic growth.
Trump's address at the Capitol Building—his first Congressional speech since returning to power—further fueled market fluctuations as investors assessed potential shifts in US trade policy.