US Court Blocks Trump's Sweeping Tariffs
AUD
The Aussie Dollar opens mixed, with increased volatility this morning after a US federal trade court blocked President Trump from imposing sweeping tariffs on imports under a new emergency-powers law. The ruling from a three-judge panel at the Court of International Trade came this morning after several lawsuits arguing Trump has exceeded his authority. Risk sentiment should see some support from the headlines, although safe-haven currencies are losing traction on the back of this news. Yesterday, Australian consumer inflation held steady in April as higher health and holiday costs offset a drop in petrol prices, although the monthly measure tends to be volatile and left hopes for more interest rates cuts mostly intact. Australian CPI rose 2.4% in April compared with a year earlier, unchanged from March but above median forecasts of 2.3%. Still, those figures remained in the central bank’s target band of 2-3%. Asian equities finished the day mostly reserved, Hang Seng -0.5%, while the Shenzhen and Nikkei were flat. Locally the ASX 200 traded slightly down -0.1%, despite +2.2% gains in the energy sector. Commodities closed mixed with Gold flat, Silver -0.1%, Iron Ore +0.2% and Copper -1.3%. Quiet day ahead for domestic releases with only Private Capital Expenditure q/q set for release at 11:30am, however, tomorrow we will get our Retail Sales m/m forecasted at +0.3%, in line with the previous release.
USD
The AUDUSD coupling opens lower this morning at 0.6426, extending its recent decline despite slightly stronger-than-expected inflation data from Australia yesterday, with markets instead focusing on the RBA's dovish stance. Policymakers have flagged downside risks to growth stemming from elevated US-China trade tensions and have cited slowing inflation. Adding to the Aussie’s weakness, the US dollar continued to strengthen on the back of improving economic sentiment in the US. The FOMC Meeting Minutes earlier this morning also confirmed Federal Reserve officials were worried about the possibility that higher inflation resulting from the White House trade policy might lead to lasting higher inflation, even as central bank staff were noting that recession odds were high and the risks of higher inflation and slow growth led Fed officials to back a cautious approach to interest rates. For the third straight meeting, they voted to keep the benchmark interest rate stable in a range of 4.25% to 4.5%. US equities on the other hand closed in the red with the Dow Jones -0.6% while both the S&P 500 and Nasdaq closed -0.5%. Big day for US data releases as later this evening we will get Prelim GDP q/q, Unemployment Claims and Pending Home Sales m/m.
EUR
AUDEUR opens higher this morning at 0.5720, gaining +0.6% over the past 2 hours after a US federal trade court blocked President Trump's sweeping tariffs this morning. Yesterday’s German Import Prices, and German Unemployment change both missed forecasts. Eurozone equities wrapped up the session worse for wear with the DAX -0.8% and CAC -0.5%. Quiet day for the Eurozone mainly due to the French, and German bank holidays, with the only release being the Italian 10-y Bond Auction with no forecasts, however, all eyes will be focused on tomorrow’s data releases with German Prelim CPI m/m forecasted to drop from 0.4% to 0.1%, and Spanish Flash CPI y/y also forecasted to drop slightly from 2.2% to 2.1%.
GBP
AUDGBP opens higher this morning at 0.4784 after what was a quiet day yesterday for UK news, with only MPC Member Lombardelli speaking. UK equities also saw a dip with the FTSE closing lower -0.6%. Another quiet day for the UK with only MPC Member Breeden Speaking later this evening, however the main event will be early tomorrow morning at 5am with Bank of England Governor Bailey set to speak.
NZD
The AUDNZD coupling continued its fall opening this morning lower at 1.0781 after New Zealand’s central bank cut its benchmark rate by 25 basis points to 3.25% and flagged a slightly deeper easing cycle than it forecast three months ago, underlining the growing risks to economic growth from a sharp shift in US trade policies. The central bank has slashed rates by 225 basis points since August, with lower inflation giving policymakers leeway to reduce borrowing costs as the economy faces fresh global risks from Trump’s international trade war. RBNZ’s Hawkesby also spoke earlier this morning, stating there are weaker demand and weaker inflation pressures then there were in February.