Greenback Surges on Trade Optimism
AUD
Global risk sentiment sheds with US & China agreeing to cut reciprocal tariffs for 90 days until a trade agreement is reached. Chinese tariffs on US imports have reduced to 10% from 125%, while US tariffs Chinese imports have reduced to 30% from 145%, seeing the AUD gain against majors in the immediate aftermath. Gold sheds -1.3%, Silver gains 0.3%, Iron Ore dropped -0.6%, Copper -0.5%, with Oil gaining 1.7% and Nat Gas gaining 2.3%. Asian equities were mixed, with the ASX closing only a few points higher and the Shanghai Comp gaining 0.8%. Locally, there was no news released, with NAB Business Confidence is set to be released at 11:30am today, it will provide an interesting read on how heightened global uncertainty is impacting Australian business confidence. Out of China we may see the tentative release of New Loans, with expectations of a drop from 3640B to 710B, but volatility may be expected with the new trade deal.
USD
The AUDUSD drops to a near-2-week low, breaking back through the 0.64 barrier, opening this morning at a rate of 0.6372. This comes after the USD surged to a monthly high overnight with the US and China agreeing to slash tariffs for the next 90 days. Wall Street also rallied hard, with the DOW JONES up 2.8%, S&P 500 up 3.3% and NASDAQ up 4.3%. Tonight, we will see the U.S. CPI for April where the consensus is that both the headline and core inflation will accelerate to +0.3% m/m. In March, the measure showed a sharp moderation, with the headline measure falling by -0.1% m/m and core inflation coming in at +0.06% m/m. Tonight's data will be closely watched for indications of how the trade spat has impacted the economy and expectations for further interest rate cuts from the Federal Reserve.
EUR
The AUDEUR sees a strong rally, with the pair getting close to the 0.5780 barrier in the afternoon, pulling back overnight to this morning’s open of 0.5744. Euro stocks saw mixed gains, with the DAX gaining 0.3% and the CAC gaining 1.4%. It was a quiet day yesterday for Europe, with no notable news being released, with German ZEW Economic Sentiment expected to rise to 10.7 from -14 tonight.
GBP
The AUDGBP sees a volatile 24 hours, with the pair gaining 0.75% in the morning, then losing it in the night, opening this morning flat at 0.4836. British equities saw mild gains, with the FTSE closing up 0.6%. Early this morning saw the release of BRC Retail Sales Monitor y/y coming in higher at 6.8%, expected at 2.4%. Tonight will see the release of the Claimant Count Change, expected to rise by 3.6k to 22.3k. Average Earnings Index 3m/y is also set to be released, forecasted to slow to 5.2% from 5.6%.
NZD
The AUDNZD rallies to a monthly high, with the pair flirting with the 1.09 barrier in the afternoon, opening this morning at a rate of 1.0872. There was no news released yesterday, with none being released today either.