• The Australian Dollar declined as traders adopted caution due to fears over Trump’s tariffs on Chinese goods.
• The AUD/USD pair appreciated more than 1% on Thursday after the Fed announced a 25 basis point rate cut.
• Fed Chair Jerome Powell emphasized that the central bank will continue to assess economic data to decide future rate directions.

The Australian Dollar (AUD) edges lower against the US Dollar (USD) on Friday. The downside risks for the AUD/USD pair remain due to the concerns about Donald Trump’s proposals to raise tariffs on Chinese goods, given that Australia is one of the largest exporters to China.

However, the AUD/USD pair appreciated more than 1% as the US Dollar (USD) faced challenges following the Federal Reserve's interest rate decision in the previous session. Additionally, the Aussie Dollar received support from China's trade balance, which was better than expected and released on Thursday.

The Federal Open Market Committee (FOMC) lowered its benchmark overnight borrowing rate by 25 basis points (bps) to a target range of 4.50%-4.75% at its November meeting on Thursday. Investors are now anticipating the release of the preliminary US Michigan Consumer Sentiment, which is expected later on Friday.

Federal Reserve Chair Jerome Powell indicated that the central bank is proceeding with interest rate cuts, given the ongoing tightness of monetary policy. Powell emphasized that the Fed will continue to assess economic data to decide on the "pace and destination" of future rate changes, highlighting that inflation has been gradually slowing toward the Fed's 2% target.