Thin Trading Conditions No Help To AUD Over Easter Break
AUD
The AUD was relatively subdued on the Thursday close, excluding the AUDUSD pair, trading with mixed results against most major G10 Currencies. Asian Equities were largely down across the board on Thursday, with the Nikkei down -1.1% and the Nikkei closed -0.5%. The ASX surged in the session and closing 0.6% higher with Travel stocks being the big winner, including Qantas having its best session since 2021. Little domestic macroeconomic data saw Chinese GDP and Retail Sales as the headline data. Surprisingly GDP printed at 4.8%, ahead of expectations of 4.2% leading to some questions about authenticity of numbers, and Retail Sales came in at a -3.5%. Going forward, the Australian Economic docket features the Minutes from early April RBA board meeting. These will be dissected and interrogated for any indication of an early rate hike as well as any tightening of the monetary policy.
USD
The AUDUSD pair experienced a bloodbath session on Easter Monday perhaps weighed on amid the lockdown situations in China, slipping below the 0.74 handles and plunging to lows of 0.7346 before trading at a rate of 0.7358 this morning. Wall Street finished the session largely subdued with the S&P up 0.2%, Nasdaq down -0.1% while the Dow Jones closed with no movement. Oil climbed 1% to $108 a barrel while US Yields edged only fractionally higher. To the data, US Retail Sales in March rose 0.5% MoM, lower than expectations but it is worth noting that February was revised up to 0.8%. And, Initial Jobless Claims for the last week ending on April 9 jumped to 185K from 171K expected, as data showed on Thursday. Looking ahead the speech from Fed Chair Jerome Powell may be the key event for the US docket today. However, investors may focus on the upcoming RBA Meeting Minutes in Australia.
EUR
The AUDEUR pair grinded lower on Thursday close as trading conditions thinned with the pair trading at a rate of 0.6822 at the time of writing. European Equities finished the week off in the green with the CAC up 0.7% and the DAX closed behind up 0.6%. In the event on Thursday, Economic sentiment figures for Germany and the Eurozone weakened further. In April, Germany’s ZEW Economic Sentiment Index slipped from -39.3 to -41.0, with the Eurozone’s falling from -38.7 to -43.0. On the monetary front, the ECB left the settings unchanged as widely expected though offered little in the way of information in the statement and talked of downside risks to the economy stemming from the war in Ukraine. Later in the day, headlines hit the news quoting ECB sources, suggesting a rate hike in July was still possible. A lack of any market moving data this week will have the FED and ECB rhetoric be the main fundamental drivers, with ECB Lagarde and Fed Chair Powell scheduled alongside one another on Thursday.
GBP
The AUDGBP followed suit and moved to fresh lows in the session with the pair trading at a rate of 0.5653 at the time of writing. The FTSE 100 index ended the session up 0.5% on Thursday as stocks rallied following a dovish ECB meeting. Little in the way of any domestic data with UK Political headlines pertaining UK PM Boris Johnsons recent scandal. Given the worsening cost-of-living crisis in the UK, pressure has been mounting on the PM to resign. Otherwise, broader themes of the Ukraine war and Central Bank speak has been the driver for price action. BoE Governor Bailey and Fed Chair Powell will both be orating later this week with market strategists likely monitoring this for any rhetoric.
NZD
The AUDNZD pair was relatively subdued on Thursday and trades among levels seen last week, the Kiwi pair has maintained this 12-month high, trading at a rate of 1.0924 this morning. In the absence of any major market-moving economic releases, the NZD pair traders have taken cues from developments surrounding the Russia-Ukraine saga as well as the recent Chinese lockdowns which will drive market sentiment and provide some impetus to the AUDNZD pair. The key day for data domestically in the NZ will be on Thursday with the Q1 CPI with headline inflation figures being watched closely.