Greenback Rattled by Trade War Fears
AUD
The AUD sees a mixed performance across the majors, seeing Trump’s tariff’s hit yesterday afternoon impacting global risk sentiment with fears of retaliatory measures, seeing commodities take a hit, with only the precious metals missing the sell-off. Gold closed up 0.1%, Silver up 0.7%, Crude Oil was down 0.9%, Nat Gas down 3.4%, Iron Ore down 1.3% and Copper down 0.7%. Asian equities were mixed, with the ASX down 0.6% and SHANGHAI COMP up 0.2%. Yesterday saw the release of the Monetary Policy Meeting Minutes, which came out as expected, mentioning the recent RBA interest rate cut was based on a slowdown in inflation and wages, and that US trade policies could impact businesses and households. Retail Sales m/m came out as expected at 0.3%, rising -0.1%. Today we have the GDP q/q set to be released, expecting to double growth, going from 0.3% to 0.6%. Some economists believe with the trade war between China and the US, Australia may be filling in the gap, which would give a boost to the local economy.
USD
The AUDUSD opens the day higher, with the pair seeing a strong rally this morning, gaining over 1% since midnight, opening at a rate of 0.6265. This comes after the USD fell to a three-month as concerns about slowing growth and the impact from potential tariffs on the US economy outweighed any potential boost from new levies on Canada, China and Mexico. Wall Street was mixed into the close, with the DOW JONES down 0.6%, S&P 500 down 0.4% and the NASDAQ up 0.7%. President Trump spoke early this morning, reiterating the tariffs that he put into place yesterday afternoon. It was a further 10% on China and 25% on Canada and Mexico. Tonight, we will see him having a speech to Congress, explaining his actions he has taken since his inauguraion. This is likely to give further insight into plans he will be making into the future with critical economic decisions like Tariffs, which have come into effect in a different way than talked about before his presidency. We will also see ADP Non-Farm Employment Change is set to be released, expecting to lower 42k to 141k, Final Services PMI set to remain at 49.7 and ISM Services PMI to slightly contract to 52.5 from 52.8.
EUR
The AUDEUR has taken a fall over the past 24 hours, seeing the pair break the 0.58 barrier last night, opening this morning at a rate of 0.5898. It was a brutal day for the Euro stocks, with DAX falling 3.5% and the CAC down 1.9%. To the news there wasn’t much critical data out yesterday, with the Unemployment Rate remaining at 6.2%, expected to rise 0.1%. Tonight, Final PMIs are set to release from several nations in the EU, all looking to show a slight improvement, with further economic pressures placed on Europe with the US tariffs, they desperately need to get growth to counter this.
GBP
The AUDGBP opens flat at 0.4899, having dipped to fresh 5-year lows of 0.4875 yesterday before rallying this morning to current levels. The FTSE closed -1.3%, following the global sell-off that equities are facing due to deteriorating rising risk sentiment. No major news happened yesterday out of England, however, tonight we will see the Monetary Policy Report Hearings from their recent interest rate decision last month.
NZD
The AUDNZD opens slightly lower at 1.1060, with minimal data except for the GDT Price Index releasing at -0.5%. ANZ Commodity Prices m/m are to be released at 11am, previously at 1.8% and RBNZ Gov Orr will speak tomorrow morning at 7:30am, potentially discussing his views on future monetary policy.