AUD Trading Familiar Levels
AUD
The AUD had a relatively subdued overnight session, trading within tight ranges across most major currency pairs, USD excluded. Local Equity and Commodity markets also had a subdued session with the ASX, Shanghai Comp and Nikkei all posting modest gains, the ASX still remaining within range of its all-time highs, sitting above 7000 points. Iron Ore was up 1.3% and Copper was up 1.2%, lending support on the AUD, Gold was the only loss of -0.1%. IN what is scheduled to be a light week of economic data, the local calendar has nothing to offer today except Goods Trade Balance which will likely come and go without fan fare. AUD is generally sitting within familiar levels across the board as we wait for the next shift in risk sentiment (China trade tensions, Virus numbers) or changes to Central Bank tapering/tightening talk from the major global economies.
USD
The AUDUSD pair had some modest gains in the overnight session, currently trading at 0.7753 at the time of writing. US Equity markets performed well overnight with the Dow Jones, S&P500 and the Nasdaq all posting gains, Nasdaq the only notable gain of +1.4%. U.S 10-year yields have retreated to 1.61%. Oil had another strong session and gained 3.8% to trade at $66 a barrel. The AUD gains are most notably due to the broader US dollar weakness after downbeat US Data, Fed Comments and suggestions that the jump in inflation is temporary. Last night Fed Governor Lael Brainard rejected reflation fears being a threat to the Fed while saying, “the Fed has the tools to deal with inflation if it moves persistently above target.” Along the same line was St. Louis Fed President James Bullard who anticipated more inflation but added that it would mostly be temporary. No-noteworthy data this morning in the US with traders awaiting the US Employment data on Thursday night.
EUR
The AUDEUR also sitting in comparable levels to yesterday morning, trading at 0.6346 at time of writing. A holiday in Europe and broader US dollar weakness kept these currency pairs trading within range of the other. European Equities posted modest gains overnight, with the DAX up 0.4% and CAC up 0.3%. The economic calendar tonight is on the lighter side with the German IFO Business climate due, Macquarie Strategy expect a recovery in the IFO Expectations index, which surprisingly dropped in April following the imposition of new social distancing restrictions. The restrictions are now bearing fruit with the Covid contagion rate dropping below a key level. Germany has also accelerated its vaccine programme, further raising businesses hopes that restriction will soon be eased. However, global supply chain problems present a downside risk to business sentiment. A leading German car manufacturer already warned that the global chip shortage would hit production in Q2.
GBP
The AUDGBP pair posted modest gains in the overnight session, as we trade at 0.5472 at the time of writing. It was a relatively subdued session as fresh vaccine data in the UK helped support the sentiment of a full UK Economic recovery after the recent lockdowns. UK Equities had a positive session with the FTSE up 0.5%, remaining at its respective all-time high. To the data, the address of four BoE policymakers to a parliamentary Treasury Select Committee will be in focus this morning, with general view that the central bank is more upbeat on UK recovery than markets, suggesting the pound should remain supported. No other noteworthy data tonight.
NZD
AUDNZD has taken a step back, now trading towards the bottom of the last month's range at 1.0742. Nothing of note on the data calendar from across the ditch today, however tomorrow's RBNZ meeting will give traders something to sink their teeth into.