The Australian dollar drifted higher against the US dollar in overnight trade, benefiting from a drop in US yields seen during the session.
However, as seen in the scoreboard below, the Aussie actually underperformed against the crosses.
- AUD/USD 0.7573 , 0.002 , 0.26%
- AUD/JPY 85.56 , -0.99 , -1.14%
- AUD/CNH 5.1568 , -0.0078 , -0.15%
- AUD/EUR 0.7046 , -0.0012 , -0.17%
- AUD/GBP 0.6055 , -0.0051 , -0.84%
- AUD/NZD 1.0482 , -0.0055 , -0.52%
Imre Speizer, senior market strategist at Westpac, said that comments from US president Donald Trump may have negatively impacted investor sentiment, including enthusiasm for the Aussie.
“A void of data in EU and US left markets at the mercy of comments from Trump’s Administration,” he wrote on Tuesday morning. “Ending of current NAFTA and Trade comments, including “very major” border taxes for corporates may not be surprises but triggered further risk position unwinding.”
As was the case on Monday, there’s next to nothing in terms of economic data and events in Asia that appears likely to generate significant volatility in the Aussie, with flash manufacturing PMI from Japan the only significant release of note.
And that’s unlikely to move the Aussie, let alone the Japanese yen.
Outside of that release there’s nothing, almost certainly ensuring that movements in the Japanese yen and Chinese yuan — influential on the US dollar index in Asia — will likely dictate movements in broader currency markets on Tuesday.
Later in the session, there’s a swathe of manufacturing and services flash PMIs release in Europe along with flash manufacturing PMI, existing home sales and Richmond Fed business index in the US.
Given recent PMI reports have been widely cited as evidence that both business activity and inflationary pressures are picking up, if there’s going to be any meaningful reaction to the data calendar this evening, it will most likely come from these releases.