The Australian dollar pushed higher against most major currencies on Monday, assisted by broad-based US dollar weakness and an improvement in investor risk appetite.
Here’s the scoreboard as at 6.55am AEST.
AUD/USD 0.7699 , 0.0024 , 0.31%
AUD/JPY 82.18 , 0.21 , 0.26%
AUD/CNH 4.8531 , 0.014 , 0.29%
AUD/EUR 0.6248 , 0.0005 , 0.08%
AUD/GBP 0.5447 , 0.0012 , 0.22%
AUD/NZD 1.0536 , -0.0007 , -0.07%
AUD/CAD 0.9771 , -0.0037 , -0.38%
After opening the week at .7675, the AUD/USD operated in a familiar range throughout Monday’s session, finding support at .7650 with sellers still lurking above the .7700 level.
News that China is evaluating the potential impact of gradual depreciation in the Chinese yuan to help combat proposed tariffs from the United States initially knocked the Aussie sharply lower in early European trade.
However, as they have now done on several occasions, traders took the opportunity to buy the dip, which, along with an early surge in US stocks, helped propel the AUD/USD back above .7700.
Analysis from the US Office of Management and Budget (OMB), showing projected US government budget deficits are likely to soar in the years ahead, may have contributed to the broad-based US dollar weakness seen during the session.
“The numbers serve as a reminder of the pressure that will be bearing down on the US dollar in the quarters and years ahead from the ever expanding ‘twin deficits’,” said Ray Attrill, Head of FX Strategy at the National Australia Bank (NAB).
Turning to the day ahead, geopolitics looks set to dominate once again with Chinese President Xi Jinping due to deliver a keynote address as the Boao forum for Asia in Hainan.
“International interest likely to be focused on what Xi may or may not say about market access,” says Attrill at the NAB.
While they will likely play second fiddle to the headlines coming out of China, there’s also a smattering of second-tier data releases scheduled in Asia today.
In Australia, the weekly ANZ-Roy Morgan consumer confidence index will be released at 9.30am AEST. That will be followed two hours later by the NAB’s monthly business survey for March.
Boom-time like operating conditions are now all but expected by markets, making it far harder to get traders excited about anything other than a reversal of those recent trends.
Regionally, Chinese is also scheduled to release monetary growth figures for March around midday AEST.
Later in the session, data highlights include French industrial output, Canadian building permits along with producer price inflation and the latest NFIB small business confidence survey in the United States.
On the policy front, Robert Kaplan of the Dallas Fed and Andrew Haldan, Chief Economist at the Bank of England, are also expected to deliver speeches.