AUD Advances on Tariff Turnaround
AUD
The AUD opens stronger across the board after Trump delayed tariffs on Canada and Mexico for at least 30 days. Asian equities finished the day largely mixed, Shenzhen 300 -0.4%, Nikkei +0.7% and Hang Seng +2.8%. The ASX 200 closed -0.1% as consumer discretionary and real estate weighed. It was a quiet last 24 hours for both Chinese and Aussie data. Today, we have the Caixin Services PMI being released, forecasted to be released slightly higher than last month. Tomorrow, we have the Aussie Goods Trade Balance being released around midday as well as the NAB Quarterly Business Confidence.
USD
AUDUSD continues its recovery from near-5-year lows of 0.6087 on Monday, opening today at a rate of 0.6252. This was due to Trump delaying tariffs on Mexico and Canada for at least 30 days. Also JOLTS Job Openings data was released overnight, coming in significantly lower than expected, which further weakened the US dollar. Though the JOLTS report runs a month behind other jobs data, the Federal Reserve watches it closely for signs of a slack or tight labour market. Wall St. rebounded overnight with the Nasdaq trading +1.3%, the S&P 500 +.7%, and the Dow Jones +.4% late in the North American day. At 9:00 am this morning we have President Trump holding a press conference relating to the Israel – Hamas conflict, off the back of his tariff decisions we saw at the beginning of the week. Tonight's data will include the ADP Non-Farm Employment Change and ISM Services PMI.
EUR
AUDEUR opens slightly higher, opening at a rate of 0.6026 with some volatility over the last 24 hours off the back of Trump not ruling out the possibility of imposing tariffs on Europe in the future. In terms of equities, DAX came in at 0.4% with CAC coming in at 0.7%. No major data overnight, and there is little major European data being released today except for the Final Services PMI being released tonight at about 8pm, which is forecast to be flat against last month.
GBP
AUDGBP opens slightly higher, opening at a rate of 0.5011. Similar to the Euro, there was slight volatility over the last 24 hours due to President Trumps talks regarding a global trade war. The FTSE came in at -0.1%. There was no major data overnight, and little today with just the Final Services PMI forecasted to open flat being released at 8.30pm. All eyes are on the Bank of England interest rate decision being released tomorrow evening, with a rate cut of 25bps to 4.5% looking extremely likely.
NZD
AUDNZD opened slightly higher, opening at a rate of 1.1065. At 8.45am we saw the release of key employment data from NZ. As expected, the Unemployment Rate has risen to 5.1%, the highest it has been since September 2020. This is expected to have a hefty impact on the strength of the NZD. Also, the number of employed people slipped -0.1% in the previous quarter, against -0.2% expectations. With Kiwi inflation close to the RBNZ's target midpoint and monetary settings still slowing the economy, further easing from the RBNZ looks appropriate. Tomorrow is a bank holiday in NZ and there is no data being released for the rest of the week.