Home Daily Commentaries AUD steady despite rise in US yields and falling iron ore prices

AUD steady despite rise in US yields and falling iron ore prices

Matt Richardson
Written by
Matt Richardson

Matt Richardson

OFXpert

Matt provides expertise in currency risk management to his clients, drawing from his 14 years of experience in foreign exchange.

| Thursday 14 March, 2024

Daily Currency Update

The Australian dollar tracked within a narrow range through Wednesday, bouncing between US$0.66 and US$0.6630. It was a relatively quiet day across financial markets with currency moves well contained and equities largely subdued as investors await the next catalyst that could trigger a shift in direction. Despite an uptick in US treasury yields and a further decline in Iron ore prices, the AUD held onto gains above US$0.66. Iron ore prices tumbled a further 2.6% amid rising concern surrounding Chinese demand. With very little ramp up in construction activity since the Lunar New Year, prices could well fall further and the fickle relationship between iron ore prices and AUD value may become to hard to ignore. Offsetting declines in Iron ore was a rise in copper prices. Copper outperformed other commodities jumping 3% amid a decline in supply as Chinese smelters dial back production.

Our attentions now turn to a busy US docket with PPI and retails sales data headlining.

Key Movers

Price action across currency markets was largely subdued through Wednesday with Norwegian Kroner leading gains among major currencies amid an uptick in Oil prices following a Ukrainian Drone Strike on Russian Oil refineries. The US DXY index edged lower on the day while the GBO And Euro offered little to excite investors. Reports that the Bank of Japan may tweak its policy framework at next weeks policy meeting, dominated investors attentions. Confirmation a string of Japanese unions had secured a 5.3% uptick in average wages removed fears a tighter financial conditions will further suppress activity, bolstering calls for policy makers to begin the process of exiting negative interest rates and yield curve controls. The USD edged lower, unable to hold onto gains above 148.

Our attentions turn now to US PPI and retails sales data ahead of manufacturing and consumer sentiment numbers Friday.

Expected Ranges

  • AUD/USD: 0.6500 - 0.6700 ▲
  • AUD/EUR: 0.6000 - 0.6100 ▲
  • GBP/AUD: 1.9250 - 1.9450 ▼
  • AUD/NZD: 1.0700 - 1.0800 ▲
  • AUD/CAD: 0.8880 - 0.8980 ▲

Written by

Matt Richardson

OFXpert

As a Senior Corporate Client Manager, Matt provides expertise in currency risk management to his clients, drawing from his 14 years of experience in foreign exchange. Matt has clients who he has been working with for over a decade, a testament to his knowledge and dedication in the field. Matt is also a regular contributor on Ausbiz, offering clear and precise updates on currency market trends, showcasing his ability to interpret complex financial data into actionable insights.