AUD Dips as Trump Accelerates Tariffs (Again)

AUD

AUD opens lower against all majors as selling pressures intensified with confirmation from President Trump that the 25% tariffs on Mexico and Canada will commence next week, not in April, and an additional 10% tariffs on Chinese goods. The ASX closed +0.3% higher as consumer staples outperformed. Asian equities had a muted session on Thursday with the Nikkei ending +0.3%, the Shenzhen +0.2% and the Hang Seng -0.3%. Private Capital Expenditure q/q came in down from +2% in the previous quarter to +0.5%. Private Sector Credit m/m will be released today forecasted at 0.5%, down from 0.6% in the previous month. No data to come out today, though we will see Chinese PMIs out tomorrow with expectations of a stagnant manufacturing sector (following months of contraction) and slight expansion in the non-manufacturing sectors.
 

USD

AUDUSD saw the biggest daily decline year-to-date, falling over 1.6% to open at 3.5-week lows of 0.6234 after President Trump confirmed tariffs on Mexico and Canada will commence next week, not in April, as well as an additional 10% tariffs on China. A soft session on Wall St. overnight saw the Nasdaq trading -1.7%, the S&P 500 -.9%, and the Dow Jones -.1%. Fourth quarter GDP came in as expected at 2.3% and US Durable Goods Orders m/m came in at 3.1% up from -1.8% the previous month. Pending Home Sales forecasted at -0.9% came in lower at -4.6% the lowest level on record in January and US initial Jobless Claims saw numbers of 242K versus 221K forecasted. Tonight, we'll see the Core PCE Price Index m/m early Saturday morning, forecasted at 0.3% up from 0.2%.
 

EUR

AUDEUR saw a marginal drop overnight, losing the 0.60 handle, opening this morning at 0.5997 as rump brought tariffs forward (again). European markets remained heavy into the close with the CAC losing 0.5%, the DAX and Stoxx were the hardest hit, down -0.9% and -0.7%. Spanish Flash CPI y/y came out as expected at 3% seeing it rise from previous 2.9%. European Central Bank policy meeting records were released stating inflation is still expected above target in the short term. German Prelim CPI m/m is released today, expected at 0.4% up from -0.2% previous.
 

GBP

AUDGBP saw a continued gradual decrease, losing sight of the 0.50 barrier and opening at 0.4948. The FTSE held steady with an increase of +0.3%. No data coming out overnight, but we saw MPC Member Dhingra speak about trade fragmentation and monetary policy, stating tariffs are unlikely to spark persistent inflation. Tonight, MPC Member Ramsden will be speaking. The Nationwide House Price Index will also be released.
 

NZD

AUDNZD held steady compared to the other majors, opening at 1.1072, after both currencies weakened off Trump's confirmation of an additional 10% tariffs on China. ANZ Business Confidence came out yesterday up to 58.4 from 54.4 previously. No other data will be out today or over the weekend.