The Australian dollar climbed off the mat in overnight trade, recovering after falling to a one-week low in European trade.
Here’s the scoreboard as at 7.55am AEDT:
- AUD/USD 0.7674 , -0.0014 , -0.18%
- AUD/JPY 85.27 , -0.63 , -0.73%
- AUD/CNH 5.2668 , -0.0177 , -0.33%
- AUD/EUR 0.7106 , -0.0005 , -0.07%
- AUD/GBP 0.6146 , -0.0015 , -0.24%
- AUD/NZD 1.0885 , -0.0032 , -0.29%
The recovery in the Aussie mirrored that in boarder risk appetite, perhaps as a result of position adjustments ahead of a key test of the so-called “Trump trade” later in today’s session.
“Today will be a key test of this hypothesis with the US Congress voting today on a key healthcare reform bill which is seen as a crucial test of the relationship between the White House and Congress,” said Tapas Strickland, an economist at the National Australia Bank.
“If the bill does not pass, that could suggests a low willingness of Congress to accommodate Trump’s legislative agenda and could delay or reduce the scope of Trump’s signature policies of tax reform and infrastructure spending on which markets have rallied on.”
Before that vote arrives, there is little on the economic calendar for traders to get excited about, suggesting that it’s likely to be a quiet session in Asia.
Later today, UK retail sales for February will be released while the US markets will receive weekly jobless claims, new home sales and Kansas City Fed manufacturing index.
On the Fed front, Janet Yellen will be in action, although her remarks appear unlikely to move markets, says Strickland.
“The conference is aimed at the economic future of children and communities and thus unlikely to contain much in the way of policy guidance,” he says.
That means that much of the movement in the Aussie over the next 24 hours will be determined by the the passage of the US healthcare reform bill.
Here’s the Aussie dollar hourly chart: