The Australian dollar continued to rip higher in overnight trade, finishing Tuesday’s session buying .7683, the highest closing level seen since June 30 last year.
“AUD/USD added to yesterday’s gains and is approaching its recent highs set in late March,” said Joseph Capurso, currency strategist at the CBA in his morning note.
“Positive risk sentiment, including higher equity markets and commodity prices, and a softer USD in European trade compounded the lift in the AUD generated by the positive Australian business conditions report. In March, Australian business conditions rose to the highest level since October 2014 and major sub-components (including employment) improved to multi-month highs.”
The gains in the Aussie came despite the IMF downgrading its economic growth forecasts for this year and next, suggesting that markets now regard these events as a near-certainty given the frequency that they’ve arrived at in recent years.
As at 7.30am AEST, the AUD/USD currently buys .7677, down marginally on New York’s closing level. It is now close to the 77 cent level that it tried and failed to clear on three separate occasions two weeks ago.
Looking ahead to Wednesday’s Asian session, market attention will largely be on Chinese international trade data for March that will be released around midday AEST.
The report was a horror show in February, and Capurso doesn’t think things will improve materially today.
“China’s trade data was affected by the Chinese New Year holiday,” he says. “We expect a March trade surplus of US$25 billion because of low commodity prices and weak demand for imports.”
Outside of Chinese data, markets will also receive the latest Westpac-MI Australia consumer sentiment report for April at 10.30am AEST. The separate ANZ-Roy Morgan consumer confidence index fallen heavily in recent weeks, suggesting sentiment levels may decline even further in April after declining 2.2% in March.
Here’s the current Australian dollar scoreboard.
- AUD/USD 0.7677 , -0.0006 , -0.08%
- AUD/JPY 83.33 , -0.04 , -0.05%
- AUD/CNH 4.9687 , -0.0029 , -0.06%
- AUD/EUR 0.6742 , -0.0004 , -0.06%
- AUD/GBP 0.5381 , 0 , 0.00%
- AUD/NZD 1.1096 , 0.0011 , 0.10%