- The Australian dollar remained in familiar ranges on Thursday, giving back early gains against the greenback to close the session slightly lower.
- Trade uncertainty between the US and China, along with firmer US economic data, was cited as two factors that helped the US dollar reverse earlier losses in Asia.
- The economic calendar is quiet on Friday.
The Australian dollar remained in familiar ranges on Thursday, giving back early gains against the greenback to close the session slightly lower.
However, it put in a stronger performance against the crosses.
Here’s the scoreboard as at 7am AEST.
AUD/USD 0.7509 , -0.0005 , -0.07%
AUD/JPY 83.17 , 0.23 , 0.28%
AUD/CNH 4.7727 , 0.0017 , 0.04%
AUD/EUR 0.6366 , 0.0003 , 0.05%
AUD/GBP 0.5555 , -0.0015 , -0.27%
AUD/NZD 1.0914 , 0.0023 , 0.21%
AUD/CAD 0.9616 , 0.0009 , 0.09%
Elias Haddad, Senior Currency Strategist at the Commonwealth Bank, says the broader theme was a reversal of early US dollar weakness, in part due to increased uncertainty over progress in US and China trade negotiations.
“The USD recovered against most major currencies overnight and US 10-year Treasury yields traded in a firm range near 3.10%,” he said.
“Trade related political uncertainty remains a near term headwind to global economic activity, which is USD supportive.
“Chinese Vice Premier Liu is in Washington until Friday to try and resolve the trade dispute with the Trump administration, but President Trump warned he doubts China trade talks will be successful.”
The greenback may have also been supported at the margin by firmer US economic data with the Philadelphia Fed manufacturing survey coming in well ahead of expectations, driven by continued strength in prices paid, employment and new orders.
The wash up was the AUD/USD gave back earlier gains to close the session marginally lower.
Against the crosses, the Aussie put in a stronger performance, lifting against all majors except the British pound which was supported by positive reports on Brexit negotiations.
Looking to the day ahead, there’s little in the way of major economic data to dictate direction, likely ensuring that sentiment and technicals will drive market movements.
Japan will release consumer price inflation (CPI) data for April at 9.30am AEST with a deceleration in both headline and core CPI expected.
Elsewhere, German producer price inflation, trade data from the Eurozone and CPI and retail sales from Canada are the other headline acts.
On the central bank front, Kaplan and Brainard of the US Fed are scheduled to deliver speeches.
Given the quiet calendar, boarder movements in Asia could be dictated by gyrations in the USD/JPY given the influence the pair has had in recent days.