Company: FXA
Filing Date: 2025-02-26
Form Type: 10-K
Source: 0000950170-25-027258
Chunk: 61

Company: Invesco CurrencyShares Australian Dollar Trust
Filing Date: 2025-02-26
Form: 10-K
Item: Item 7
Chunk 61
---
 0.13%
     
    1.54%

    11/1/2024
     
    $
    0.08550

    $
    64.92

    0.13%
     
    1.55%

    12/2/2024
     
    $
    0.08203

    $
    64.56

    0.13%
     
    1.55%

Results of Operations 

During the years ended December 31, 2024 and 2023, the Trust's net comprehensive income (loss) was, in part, impacted by market volatility resulting from expectations around the Federal Reserve (the “Fed”) easing and heightened geopolitical concerns for 2024, and the US banking sector turmoil for 2023 which are considered to be unusual or infrequent events. Although the full and direct impact of Fed easing expectations, rising geopolitical tensions, and the US banking sector turmoil on the Trust's net comprehensive income (loss) during the years ended December 31, 2024 and 2023 cannot be known, it is believed that they have each independently impacted the Closing Spot Rate, the interest rate paid by the Depository, and the global economy and markets generally, including the number of Shares created and redeemed by the Trust. 

The Australian dollar (AUD/USD) performed negatively in 2024, with fourth quarter losses wiping out all earlier gains. In the first quarter, US dollar moves drove the bulk of the price action, though escalated geopolitical tensions also pressured investors’ risk appetite; the Aussie is considered a risky currency. The Fed’s higher-for-longer rhetoric and stickier-than-expected US inflation pushed out expectations for US rate cuts, providing support for the US dollar. However, the pair did rebound significantly in the second and third quarter – strong domestic retail sales in the second quarter raised bets that the RBA could hike rates while many global central banks had already kicked off their easing cycles. In the third quarter, the pair gained on US dollar weakness as the Fed began cutting rates, though the persisting downtrend in commodities and China pessimism capped the upside for the Aussie. However, a soaring greenback to end the year, driven by President Trump’s victory, drove the pair into deep negative territory. Many of the president’s campaigned policies were expected to raise inflation risk, potentially leading to higher rates in 2025. In addition, tariffs generally weigh on foreign currencies, further boosting the USD.