The Australian dollar has given back all of its post-RBA gains

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After hitting a high of .7632 in the wake of the RBA’s March monetary policy meeting, the Australian dollar unwound those gains in overnight trade, succumbing to a lift in US bond yields and continued weakness in commodity prices.

Some suggested the move in US yields, something that underpinned the US dollar during the session, may have been due to speculation that Friday’s US non-payrolls report for February — seen my many as the only data release that could prevent the Fed from hiking rates on March 15 — will come in stronger-than-expected.

Here’s the scoreboard as at 7.50am AEDT.

  • AUD/USD 0.7590 , 0.0014 , 0.18%
  • AUD/JPY 86.5 , 0.23 , 0.27%
  • AUD/CNH 5.2328 , 0.0048 , 0.09%
  • AUD/EUR 0.7177 , 0.002 , 0.28%
  • AUD/GBP 0.6218 , 0.0027 , 0.44%
  • AUD/NZD 1.0905 , 0.0081 , 0.75%

Joseph Capurso, senior currency strategist at the Commonwealth Bank, said the Aussie’s post-RBA move was probably down to market positioning rather than any hawkish shift in the RBA’s commentary.

“AUD bounced following yesterday’s RBA’s decision to keep the policy rate at 1.5%,” he said on Wednesday morning. “The RBA’s post-meeting statement was neutral in our view but it appears participants were short into the meeting which is why AUD lifted temporarily.”

Looking ahead, he expects the Aussie will likely remain pressured against the US dollar, suggesting that he expects “a firmer USD to undermine AUD this week”.

AUD/USD Hourly Chart

Turning to Wednesday trade in Asia, movements in the Aussie are likely to be influenced by the release of Chinese trade figures for February.

Economists expect the trade surplus to narrow sharply to $US25.75 billion, with the value of imports and exports expected to lift 20% and 12.3% respectively from the levels of a year earlier.

Given the timing of Lunar New Year holidays in China — something that has led to some wild movements in the trade data in recent years — there’s a clear risk that another surprise could arrive today.

There’s no set time for the release, although it is generally released after 1pm Sydney time.

Besides the Chinese data, Japan will also release revised Q4 GDP figures at 10.50am AEDT. It’s highly unlikely that they’ll influence the Aussie, or any markets for that matter.

Later in the session, all attention will be on the release of the US ADP National employment report for February given it is deemed to be a lead indicator on how Friday’s official jobs report may print.

An increase in private sector payrolls of 190,000 is expected, following a 246,000 lift in January.

Revised labour costs and productivity figures will also be released in the US, along with weekly US crude oil inventory data from the US EIA.

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