- The Australian dollar finished Tuesday’s session mixed, falling against the greenback but higher against most major crosses.
- An apparent ebbing in trade tensions helped to boost the greenback. The Aussie found support from another surge in crude oil prices.
- The data calendar is slow today with most of the main events arriving in the second half of the session. The central bank speakers list is busy with members of the Bank of England, Bank of Canada and US Fed all in action.
The Australian dollar fell against the greenback on Tuesday but finished mixed against the crosses.
Here’s the scoreboard as at 7am in Sydney.
AUD/USD 0.7391 , -0.0022 , -0.30%
AUD/JPY 81.3 , -0.07 , -0.09%
AUD/CNH 4.8645 , 0.016 , 0.33%
AUD/EUR 0.6344 , 0.0011 , 0.17%
AUD/GBP 0.5589 , 0.0007 , 0.13%
AUD/NZD 1.0782 , 0.0042 , 0.39%
AUD/CAD 0.983 , -0.0021 , -0.21%
The key theme of the session was US dollar strength, driven by an apparent easing in trade tensions between the United States and China.
“The latest reports are that Trump is siding with his Treasury Secretary Steve Mnuchin over trade adviser Peter Navarro in wanting to use the Committee on Foreign Investment in the United States (CFIUS) to determine whether any investments in US firms should be allowed to proceed,” said Ray Attrill, Head of FX Strategy at the National Australia Bank.
On Monday, risk assets were roiled on reports the restrictions would only be placed on Chinese entities, raising concerns over a further escalation in tensions between the two nations.
The US dollar found support on the reports, leading to broad gains across the board, including the Aussie dollar, which fell back below the 74 cent level in the second half of the session.
However, the Aussie fared better against the crosses, supported by another surge in crude oil prices due to renewed geopolitical concerns involving Iran.
Australia is a major LNG exporter, with movements in crude prices often flowing through to those in spot LNG markets.
The strength in crude prices saw the Aussie push higher against all bar the Japanese yen and Canadian dollar, the latter also a major energy exporter.
Being just four days out from quarter-end, and financial year-end in many nations, movements on Tuesday may have also been influenced by quarter-end window dressing.
Turning to the session ahead, it looks set to be dominated yet again by trade headlines given an absence of market-moving data.
Outside of New Zealand trade and business confidence there’s no other major releases scheduled in Asia.
The data calendar is also quiet in the second half of the session with UK house prices, Eurozone money supply along with durable goods orders, goods trade balance and pending home sales released in the US.
On the central bank speakers front, Bank of England Governor Mark Carney will be in action during the session. FOMC members Rosengren and Quarles will also deliver speeches, as will Bank of Canada Governor Stephen Poloz.
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