AUD: AUD/USD Close To 50-day EMA Resistance, But Lags JPY, CHF Gains
AUD/USD finished Thursday's session 1.15% higher versus the USD, the pair currently tracks close to 0.6225. Thursday saw broad based USD weakness, with the BBDXY index down 1.5%, the DXY off 1.84%. CHF was the best performer, up nearly 4%, EUR and JPY gained around 2.30%.
- Thursday’s session was categorised by some sharp reversals lower for both US equities (SPX down 3.44%) and the US dollar. While major US equity benchmarks have not entirely erased Wednesday's gains, the USD index did, and the ongoing pessimism towards the greenback prompted the USD index to print fresh cycle lows below 101.00 (for the DXY). Weakness was assisted by a set of softer-than-expected CPI data from the US.
- For AUD/USD we met resistance around the 0.6250 level. Not far above is 0.6265 the 50-day EMA, while the Apr 3 high as at 0.6389. On the downside, support points at 0.6088/0.5915 Low Feb 3 / Low Apr 9 and the bear trigger, remain in focus.
- The weaker US equity risk tone didn't do much to impact AUD/USD on Thursday, but the A$ was an underperformer against safe havens like CHF and JPY. AUD/JPY hovers around 90.00 currently, with Thursday highs near 91.11. We are still up from recent lows close to 86.00.
- Late yesterday evening, RBA Governor Michelle Bullock stated in relation to the tariff impact “It will take some time to see how all of this plays out,” Reserve Bank Governor Bullock said in a speech in Melbourne. “And the added unpredictability means we need to be patient as we work through how all of this could affect demand and supply globally.” (per BBG, see this link for more details).
- The local data calendar is empty today but note the following option expiries for NY cut later today: $0.6100(A$844mln), $0.6295-00(A$650mln).
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AUD: AUDUSD Finds Support From Ukraine News & Tests 0.6300
AUDUSD range traded through most of Tuesday but found support following news of a US-Ukraine agreement on a 30-day ceasefire, which also drove equities. The pair rose to 0.6311 but couldn’t hold the break above 63c and eased back a bit and is currently up 0.3% to 0.6296. The USD index fell 0.4%.
- Key short-term resistance for AUDUSD is at 0.6409, 21 February high, and clearance of this would strengthen a bull cycle. Initial resistance is at 0.6364, 6 March high. Initial support is at 0.6259.
- European currencies outperformed on Tuesday leaving AUDEUR down 0.4% to 0.5770 after a low of 0.5741 and AUDGBP -0.3% to 0.4860 following a trough of 0.4848.
- AUDJPY is up 0.6% to 93.01, close to the intraday high, and AUDNZD is little changed at 1.1023 following a low of 1.1004.
- Equities were still weaker on the day despite a late US session rally. The S&P is down 0.8% and Euro stoxx -1.4%. Oil prices are higher with Brent +1.0% to $69.96/bbl. Copper is up 2.8% and iron ore is stronger at around $102/t.
- There are no data or events in Australia today.
US: Trump To Deliver Remarks At Business Roundtable Event Shortly
US President Donald Trump is shortly due to deliver remarks at a Business Roundtable event in Washington, DC. Around 100 CEOs are expected to attend the meeting, including the CEOs of JPMorgan Chase, Apple, and Walmart. Trump met with tech executives at the White House yesterday. LIVESTREAM
- The remarks come amid a rout in markets spooked by Trump's hardline tariff and government reform agenda, and hints that a short-term economic disruption is acceptable for the administration.
- The Wall Street Journal wrote this morning: “Some investors say that the Trump administration's seemingly blasé attitude toward potentially setting off a downturn is rattling market watchers, who had believed that Trump's pro-growth stance would boost the economy and markets.”
OIL: Large US Crude Stock Build But Gasoline Down Sharply
Bloomberg reported that US crude inventories rose 4.2mn barrels last week after a drawdown the previous week, according to people familiar with the API data. At Cushing they fell 1.2mn barrels though. Gasoline stocks fell 4.6mn while distillate rose 400k. The official EIA data is out later today.
