AUD Extends Rally on Risk-On Mood
AUD
The Aussie Dollar marked its fifth consecutive session of gains yesterday as improved global risk appetite fueled a rally in antipodean currencies. The upbeat sentiment followed Trump's decision to exempt key technology products from his reciprocal tariffs on China, alongside reports of a potential pause on the planned 25% tariffs on auto imports. Equities and commodities also followed suit, with the ASX closing +0.2%, Shanghai Comp +0.1% and Nikkei +0.8%. Additionally, the major movers for commodities were Sugar -1.6% and Coal +1.5%. Yesterday saw the release of the RBA’s Monetary Policy Meeting Minutes, which hinted that they were in no rush to adjust interest rates. This contradicts the current market expectations that the RBA will certainly cut interest rates in May. The Minutes had a muted impact as the RBA Meeting took place before the US-China trade war escalated 2 weeks ago. Today's data will include Chinese GDP q/y (expected 5.2%), Industrial Production y/y (expected 5.9%) and Retail Sales y/y (expected 4.2%) at 12pm. Locally, Aussie employment data will release tomorrow at 11:30am.
USD
The AUDUSD opens higher at 0.6340, reaching highs of 0.6383 last night before falling to current levels. Wall Street also closed slightly down, with the Dow Jones -0.4%, S&P 500 -0.2% and Nasdaq flat. The US economic outlook remains uncertain as investors exercise caution due to the sudden 90-day pause on American reciprocal tariffs last week. This has led to a weakening of the USD as markets move towards other currencies. Last night, the April Empire State Manufacturing Index released at -8.1, better than expectations of -12.8. Tonight, we will see American Core Retail Sales m/m (expected 0.4%) and Retail Sales m/m (expected 1.3%). Additionally, Fed Chair Powell will speak on the economic outlook at the Economic Club of Chicago.
EUR
The AUDEUR opens higher at 0.5613, touching highs of 0.5644 last night before trading at current levels. On equities, the DAX closed +1.4% and CAC +0.9% which continues the recent surge of confidence in European markets. This confidence is partly a result of recent German investments into defense and infrastructure, contrasted with the uncertainty in the American markets. On the other hand, last night had the German ZEW Economic Sentiment releasing at -14.0, which missed expectations of 10.6, with the erratic changes in the US trade policy weighing heavily on recent expectations in Germany. Today will have some minor inflation data out of the Eurozone, however, tomorrow night will have the European Central Bank Main Refinancing Rate decision. Markets fully expect the ECB to cut interest rates by 25 basis points to 2.40%.
GBP
The AUDGBP opens flat at 0.4790, falling from highs of 0.4826 last night. Yesterday had UK employment data, with the Claimant Count Change releasing at 18.7k (expected 30.3k) and Average Earnings Index 3m/y at 5.6% (expected 5.7%). On equities, the FTSE closed +1.4% last night, following the rally that European markets are seeing. Today will have the UK’s CPI y/y at 4pm today, expected to be 2.7%. No other UK economic data is due to be released for the rest of the week.
NZD
The AUDNZD opens lower at 1.0740, having traded between 1.0728 and 1.0785 for most of this week. Today had the GDT Price Index release at 1.6%. Tomorrow will see quarterly CPI data release at 8:45am, expected to increase to 0.8%. No other economic news for the rest of the week leading up to the Easter period.