The Australian dollar has crawled off the mat, but whether that lasts will be determined by France

Paul Crock/AFP/Getty Images

The Australian dollar found its footing overnight, pushing modestly higher on the back of strength in global stock markets and another strong lift in Chinese iron ore futures.

Here’s the Aussie dollar scoreboard as at 7.40am AEST.

AUD/USD 0.7522 , -0.0004 , -0.05%
AUD/JPY 82.2 , -0.07 , -0.09%
AUD/CNH 5.1760 , -0.0049 , -0.09%
AUD/EUR 0.7019 , -0.0003 , -0.04%
AUD/GBP 0.5871 , -0.0001 , -0.02%
AUD/NZD 1.0730 , 0 , 0.00%

After hitting a high of .7546 earlier in the session, the AUD/USD eased into the New York close as a result of remarks from US treasury secretary Steven Mnuchin on the prospect for US tax reforms.

“Higher US bond yields… owe something to remarks from US Treasury Secretary Steve Mnuchin,” said Ray Atrill, global head of FX strategy at the National Australia Bank.

“At an Institute for International Finance event in Washington, Mnuchin spoke optimistically of tax reform coming before the end of the year and not necessarily being tied to first completing reform of the Affordable Care Act.”

Despite uncertainty over whether such an aggressive timetable is achievable, particularly given the inability for the Trump administration to push through healthcare reforms last month, the remarks helped to boost US treasury yields and with it the US dollar, keeping the Aussie’s gains in check.

The AUD/USD hourly chart explains the overnight price action perfectly.

AUD/USD Hourly Chart

With the Aussie currently trading just above the 75 cent level, trade today looks set to be quiet as traders await the outcome of the first round of the French presidential election held on Sunday.

“Sunday’s first round of voting in the French Presidential elections will be one of the main talking point across global markets today,” says Attrill.

In what looks set to be a tight contest, with no clear winner apparent yet, it’s unlikely that there’ll be any significant moves in the Aussie today, particularly with a quiet data calendar in Asia.

Apart from the release of the latest flash manufacturing PMI report from Japan at 10.30am AEST, there’s nothing else to speak of.

Given the focus on iron ore prices this week, Australia’s largest goods export by dollar value, the performance of Chinese futures during the session could prove influential on the Aussie today, if only in the short-term.

US bond yields, and the subsequent reaction in USD/JPY, could also dictate movements in the Aussie.

Later in the session, markets will receive flash manufacturing PMI figures from the US, Eurozone, Germany and France, along with UK retail sales, Canadian CPI and US existing home sales.

These have the potential to generate short-term volatility, although it’s likely that most traders will be looking ahead to the French election result.

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