Daily Currency Update

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Currency markets unmoved despite rising equities and volatility in bond yields

AUD - Australian Dollar

The Australian dollar held onto recent gains through trade on Thursday, yet failed to extend beyond resistance at 0.7750. Volatility across bond prices and a surge in equities helped underpin recent risk appetite improvements. The S&P 500 advanced 1% to mark new record highs, while bond yields fell sharply, however moves across currency markets remained largely muted. Despite strong gains in job creation and a larger than anticipated dip in the unemployment rate, domestic labour market data had very little impact on AUD value through the local session. Investors are perhaps conscious that the impacts of JobKeeper removal will not be felt until April, May and June. Having touched intraday lows at 0.7705, the AUD bounced back toward 0.7750 and maintained a tight range through the overnight session fluctuating between 0.7740 and 0.7760.

Our attentions today remain with price action across bond prices and the underlying risk narrative. Further yield weakness could amplify USD losses and help the AUD push through 0.7760 toward 0.78 US cents.

Key Movers

Price action across currency markets was largely muted through trade on Thursday, as sustained risk demand helped commodity and emerging markets hold onto Wednesday’s uptick. The US dollar came under sustained pressure amid falling bond yields, as investors largely ignored gains in key macroeconomic data sets. Retail and Core Retail sales jumped sharply in March, comfortably surpassing market expectations, while the Philly Fe manufacturing index outperformed and unemployment claims printed well below expectations. The dollar index touched intraday lows at 91.50 before edging back toward 91.70, ahead of this mornings Australasian open.

The euro offered little to excite investors, having failed to break back above 1.20 and trades just below this psychological handle at 1.1968.
Sterling edged marginally higher touching highs at 1.3810 before slipping back toward 1.3780.

With little of note on today's ticket our focus remains with bond prices and risk appetite for direction into the weekly close.

Expected Ranges

AUD/USD: 0.7650 - 0.7820 ▲

AUD/EUR: 0.6390 - 0.6520 ▲

GBP/AUD: 1.7680 - 1.7920 ▼

AUD/NZD: 1.0780 - 1.0830 ▼

AUD/CAD: 0.9650 - 0.9770 ▲