Trump-Driven Risk Aversion Weakens Aussie Dollar
AUD
The Aussie Dollar was mixed against the major currencies, as global risk sentiment and threats to global supply chains continue to stoke risk-off attitudes, which has increased demand for safe-haven assets. Asian equites finished weaker yesterday as unrest continued across the Middle East with the Nikkei -2.8%, Hang Seng -0.8% and the Shenzhen -0.2%. Locally the ASX 200 traded -0.65% as technology and financial sectors underperformed at -3.1% and -2.2% respectively. No data out of Asia yesterday, with the main point of interest being Anthony Albanese announcing a temporary reduction in fuel excises to attempt to curb inflation. Later today we will see the RBA Monetary Policy Meeting Minutes which may shed some light on the previous meetings split decision to hike. Looking to Asia, today we will have Chinese Manufacturing & Non-Manufacturing PMI data which is currently forecasted at 50.1 and 49.9 respectively.
USD
The AUDUSD opens lower at 0.6853 which extends its slide to a fifth straight day as the US Dollar strengthens from increasing demand to traditional safe haven assets. Risk sentiment remained soft overnight as President Trump warned of an escalation in the attacks on Iran. On Wall St, the Nasdaq was trading -1%, the S&P 500 -.6%, and the Dow Jones unchanged entering the final hour of trade. U.S.10-year yields fell 8bps to 4.34%, while Brent Crude was trading at $114 a barrel. No data yesterday, except for Fed Chair Powell speaking early this morning, noting that the Federal Reserve’s response to the US-Israeli war on Iran largely hinges on how the conflict affects Americans’ expectations about inflation. Tonight will see JOLTS Job Openings (exp. 6.89M), however the key drivers of market volatility will be the ongoing developments in the Middle East.
EUR
The AUDEUR opens flat at 0.5973, as the Middle-Eastern conflicts saw equal pressure on the currency pair mainly due to surging fuel prices. Equites were inversed, with the DAX and CAC closing at +1.2% and CAC +0.9% respectively. Yesterday had German Prelim CPI m/m release at 1.1%, meeting expectations. Today will see minor economic data with finalised Manufacturing PMIs and then a wind down leading to Easter.
GBP
The AUDGBP opens slightly higher at 0.5198. The FTSE closed +1.6% tailing Europe’s equities rally. Yesterday had minor money supply data, which came better than expected; today will have further economic data with Final GDP q/q and Current Account figures set for release. No major data until after the Easter break.
NZD
The AUDNZD opens in the green at 1.1976 as both countries struggle against surging inflation and production costs. Later this morning the ANZ Business Confidence report is set for release and tomorrow will have Building Consents m/m..