The Australian dollar is pushing higher in early Asian trade on Thursday morning, benefiting from a renewed bout of US dollar weakness following remarks from US president Donald Trump.
Here’s the scoreboard as at 7.25am AEST:
- AUD/USD 0.7529 , 0.0009 , 0.12%
- AUD/JPY 82 , 0.03 , 0.04%
- AUD/CNH 5.1812 , 0.0049 , 0.09%
- AUD/EUR 0.7053 , 0.0004 , 0.06%
- AUD/GBP 0.6002 , 0.0006 , 0.10%
- AUD/NZD 1.0791 , 0.0003 , 0.03%
And here’s the 5-minute AUD/USD tick chart from overnight which really tells the story.
It’s not hard to see the moment when Donald Trump’s remarks on the US dollar hit the screens.
In an interview with the Wall Street Journal, Trump said that the US dollar “is getting too strong, and partially that’s my fault because people have confidence in me”, adding “it’s very, very hard to compete when you have a strong dollar and other countries are devaluing their currency.”
He also backtracked on his pre-election promise to label China a currency manipulator, and also left open the possibility that current US Federal Reserve chair Janet Yellen could have her term extended beyond next year.
“I do like a low-interest rate policy, I must be honest with you,” Trump said when asked about Yellen.
Interesting remarks, particularly in relation to the US dollar.
It wasn’t manipulation, but certainly jawboning, resulting in the US dollar index falling more than 0.5%.
That helped to propel the Aussie dollar higher despite some large losses across base and bulk metals prices overnight along with persistent geopolitical concerns surrounding Syria and North Korea.
Iron ore, Australia’s largest goods export by dollar value, slumped by over 8.5%, and yet the Aussie dollar is trading higher this morning.
A resilient performance given the circumstances.
Whether the move can be sustained today will likely be determined by the data flow with major releases scheduled both in Australia and the broader Asian region.
Locally, the ABS will release Australia’s March jobs report at 11.30am AEST, carrying the potential to create even more volatility in the Australian dollar than usual given increased concerns from the RBA over current labour market conditions.
For those looking for further information before the report arrives, this 10-second guide will bring you up to speed.
Coinciding with the release of the jobs report, the RBA will also release it’s semi-annual Financial Stability Review. All attention in will be directed towards any discussion on current risks in the housing market.
Around 30 minutes later, China is also expected to release its international trade report for March.
From a year earlier, the value of exports and imports are expected to rise 3.2% and 18% respectively, leaving the trade balance showing a surplus of $US10 billion.
It could arrive at any point after midday AEST.
Later in the session, markets will receive jobless claims, producer price inflation and the University of Michigan consumer confidence report in the US along with consumer price inflation figures from Germany, France and Italy.