Following Labor's win in the 2025 Australian federal election, Prime Minister Anthony Albanese outlined his government's priorities, including cutting higher education student debt by 20%, establishing a federal environmental protection agency, and building more housing. Albanese confirmed he spoke with U.S. President Donald Trump regarding tariffs and will meet with him in the future. His first overseas trip will be to Indonesia, mirroring his first visit in 2022 after his initial election.

The Australian Dollar (AUD) has strengthened as Albanese secured a second three-year term. Australia’s Judo Bank Composite PMI showed expansion for the seventh consecutive month with a reading of 51.0 in April, although it slowed from 51.6 in March. The Services PMI also came in at 51.0, marking fifteen consecutive months of growth.

President Trump affirmed he would not replace Federal Reserve Chair Jerome Powell before his term ends in May 2026, despite previous criticisms. He also announced plans to potentially lower tariffs and initiate a 100% tariff on foreign-produced films. Treasury Secretary Janet Yellen cautioned that Trump's tariffs could have adverse effects on the U.S. economy.

Australia's economic data revealed a trade surplus of AUD 6.9 billion for March, surpassing expectations due to a rise in exports and a decline in imports. Retail Sales increased by 0.3% month-over-month in March, though falling short of market forecasts. Treasurer Jim Chalmers noted that markets still anticipate further interest rate cuts despite weakened expectations of monetary easing by the Reserve Bank of Australia (RBA).

China is reportedly considering renewed trade talks with the U.S., with the Chinese Commerce Ministry indicating Washington's interest in resuming negotiations, pending an internal assessment and corrections to U.S. tariff actions.

The AUD/USD pair is trading around 0.6460, maintaining a bullish bias. Key factors influencing the AUD include interest rates set by the RBA, the price of iron ore (Australia's largest export), and the health of the Chinese economy. A positive Trade Balance strengthens the AUD, while market sentiment and risk appetite also play a role.

Labor has secured a majority in parliament, with projections of 85 seats and leading in another seven, potentially reaching 92 seats, the most since 1996. Gains in the Senate also mean Labor can pass legislation with support from the Greens and one independent, without needing Coalition support.