Aussie Dollar Remains Subdued on Soft Inflation Data
AUD
The Aussie Dollar coasts lower against the majors fueled by cooler than expected inflation readings and uncertain US-Iran diplomacy. CPI figures for February came in lower than market expectations, Consumer Prices rose 3.7% y/y (Est. +3.8%) and Trimmed Mean CPI printed 3.3% (Est. 3.4%). Even with dovish data, the AUD had muted reactions with markets looking to upcoming energy-driven price pressures as likely to push inflation higher again which is not shown in the CPI data. Asian equities were green into the close, with the ASX closing up 1.8%, and the SHANGHAI COMP up 1.3%. RBA Assist Gov Kent is currently speaking at the Debt Capital Market Summit, in Sydney, which could shed light into the RBA’s leaning with the extraordinary fuel prices Australian’s are facing, and potential inflationary pressures it could cause.
USD
The AUDUSD slips into deeper lows opening this morning at a rate of 0.6948. Brent crude was down over 3% this morning and stocks rose as hopes built around US efforts to seek de-escalation of the Middle East conflict, even as Iran rejected a US peace plan. Wallstreet kept soft gains into the close, with the S&P 500 up 0.5% and the NASDAQ + DOW JONES up 0.6%. Import Prices m/m came out last night, seeing over double expectations at 1.3%, expected to remain at 0.6%. This is the biggest increase since 2022, with the Iranian war likely to push prices high, markets will closely watch to see if a second wave of inflation is rising. Later this morning, President Trump will be speaking at the National Republican Congressional Committee Annual Fundraising Dinner, in Washington DC. His remarks are expected to address mounting concerns over the Middle East conflict, airport security struggles and rising energy. Later tonight US Unemployment Claims is set for release, currently expected at 211k.
EUR
The AUDEUR slumps further, with the pair resting on the 0.60 barrier overnight, opening this morning at a rate of 0.6007. European equities were optimistic into the close, with the DAX closing up 1.4% and the CAC up 1.3%. Last night saw ECB president Lagarde speaking at a conference, mentioning that monetary policy can’t bring down energy prices; and the ECB won't be paralyzed by hesitation on any Iran response. Tonight is quiet on data, with Private Loans y/y set to be released, expected to increase from 3% to 3.1%.
GBP
The AUDGBP opens the day lower, with the pair dropping to a monthly low overnight, opening this morning at a rate of 0.5195. British equities were radiant into the close, with the FTSE finishing up 1.4%. CPI y/y was released last night, coming in as expected, unchanged at 3%; the Core Figure crept higher to 3.2% from 3.1%. Even with this persistent inflation, markets believe that their next meeting is still likely to be a hold, with some analysts stating that there could be 3 hikes later in the year. Tonight will see MPC Member Taylor speaking, which may give further insight into how they plan on dealing with potential Iranian fueled inflation.
NZD
The AUDNZD sees a small decline into this morning’s open, with the pair opening at a rate of 1.1968. There was no news out yesterday and their will be none for the rest of the week.