The Australian dollar continues to strengthen

Photo by Michael Dodge/Getty Images

The Australian dollar put in a resilient performance overnight, rallying against the crosses and holding firm against the US dollar.

Here’s the scoreboard as at 7.25am AEDT.

  • AUD/USD 0.7683 , 0.0026 , 0.34%
  • AUD/JPY 87.28 , 0.95 , 1.10%
  • AUD/CNH 5.2760 , 0.0272 , 0.52%
  • AUD/EUR 0.7278 , 0.004 , 0.55%
  • AUD/GBP 0.6248 , 0.0064 , 1.03%
  • AUD/NZD 1.0715 , 0.0071 , 0.67%

The Aussie benefited from a strong Australian Q4 GDP report released earlier in the session, along with some enormous gains in global stocks as expectations for a US rate hike later this month continued to firm following hawkish remarks from several leading Federal Reserve officials.

The Aussie’s gains against the US dollar were particularly impressive, coming despite a sharp lift in US bond yields on Wednesday.

“US 10-year treasury yields rose from 2.40% to 2.47% overnight, while 2-year yields consolidated yesterday’s gains following hawkish comments from [Fed members] Williams and Dudley,” said Imre Speizer, senior market strategist at Westpac.

“US Fed fund futures rates yesterday jumped higher after Williams and Dudley and consolidated overnight with the April contract now at 0.825% implying around an 80% chance of a rate hike in March.”

That helped to support the US dollar against all other major currency pairs, underlining the resilient performance from the Aussie.

AUD/USD Hourly Chart

After a flurry of major market events yesterday, the data calendar slows a touch on Thursday, although there are still some data releases scheduled in Australia.

The ABS will release building approvals and international trade figures for January at 11.30am AEDT.

Building approvals are expected to slip 0.5% having fallen by 1.2% in December while the trade surplus is expected to balloon to another record high of $3.8 billion following a $3.511 billion surplus in December.

It’s the latter that will garner most attention from markets, with another huge surplus likely to cement the view that Australia will record its first current account surplus in several decades in the March quarter, an outcome that will support the Aussie dollar should it eventuate.

Outside of those events, the economic data calendar elsewhere is fairly quiet with the exception of inflation figures from the eurozone for February along with Spanish Q4 GDP.

In North America, weekly jobless claims data will be released in the US along with Canadian Q4 GDP.

After dictating market movements over the past 24 hours, there’s also likely to be plenty of interest on remarks from US Federal Reserve members Robert Kaplan and Lael Brainard that will arrive during Thursday’s session.

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