The Australian dollar is trading higher this morning after a brief foray below the 76 cent level in early European trade.
Here’s the scoreboard as at 7.45am AEDT.
- AUD/USD 0.7632 , 0.0017 , 0.22%
- AUD/JPY 84.81 , 0.56 , 0.66%
- AUD/CNH 5.2452 , 0.0256 , 0.49%
- AUD/EUR 0.7059 , 0.0051 , 0.73%
- AUD/GBP 0.6131 , 0.0069 , 1.14%
- AUD/NZD 1.0875 , 0.0074 , 0.69%
As seen in the hourly chart below, the AUD/USD hit a low of .7588 in Europe, leaving it briefly sitting at the lowest level since March 15. However, it subsequently bounced off technical support which, along with improved investor sentiment levels, saw it jump to as high .7654 before easing lower later in the session.
Firmer commodity prices, including a rebound in iron ore prices, managed to offset renewed US dollar strength that followed the release of strong US economic data that helped to lift US bond yields.
David de Garis, director of economics at the National Australia Bank, also suggested that quarter-end flows may have been one factor that supported risk assets, including the risk-sensitive Aussie dollar.
“Getting toward the end of the month and the end of the quarter, and given the torpor of risk assets markets of late, the return of some buying could easily have occurred,” he said. “That could well be part of the explanation for overnight moves.”
Continuing the theme seen earlier this week, the economic calendar is yet again devoid of market moving events on Wednesday, likely ensuring that sentiment and quarter-end flows will continue to dictate the Aussie’s direction.
And that includes UK prime minister triggering Article 50 of the European Treaty later today, something that will start up to two years of negotiations before the UK officially departs the European Union.
That outcome, at least the initial step, is now entirely factored into market pricing.
On the data front, Japanese retail sales for February will likely come and go to little market fanfare.
Later in the session, US FOMC members Charles Evans, Eric Rosengren and John Williams are all scheduled to speak.
US pending home sales data for February, along with updated US crude inventory levels for last week, will also be released.