Australian dollar under pressure as risk aversion elevated
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Daily Currency Update
The Australian dollar underperformed on Thursday amid a softer domestic employment print and elevated risk aversion. Employment data for February was released yesterday and showed a contraction in jobs growth and steady unemployment. The softer read elevated calls for the RBA to lower interest rates again, forcing the AUD off early morning highs north of US$0.6350. The AUD continued to track lower through overnight trade sliding below US$0.63 to mark intraday lows at US$0.6274. Growing uncertainty surrounding US trade policy continues to weigh on risk aversion and with the US announcing new tariffs against Chinese Oil refineries and Iran Oil sector, the AUD was again subject to selling pressures as markets sought haven corridors. The AUD found some support leading into this morning’s open and trades just above US$0.63 at time of writing.With little headline macroeconomic data on the docket to close the week, our attentions remain affixed to US trade policy and geo-political tensions.
Key Movers
Risk aversion steered currency markets through trade on Thursday, allowing the USD to enjoy gains against almost all major pairs. The DXY index advanced 0.36% as the euro, GBP and JPY all gave up ground. US data had little lasting impact and markets largely ignored an extended decline in US yields. Uncertainty surrounding US trade policy remains front and centre, driving risk sentiment. Reports the US has tightened sanctions on the Iranian oil sector as well as introducing sanctions on Chinese refineries and 12 other entities elevated fears an all-out trade war is inevitable. The new sanctions helped lift oil prices, allowing the CAD and NOK to hold firm against the stronger dollar.With little headline macroeconomic data on the docket to close the week, our attentions remain affixed to US trade policy. The completion of the US trade departments reciprocal tariff review in early April and the response from major trading partners will prove key in shaping direction and sentiment through the weeks ahead.
Expected Ranges
- AUD/USD: 0.6200 - 0.6400 ▼
- AUD/EUR: 0.5780 - 0.5850 ▼
- GBP/AUD: 2.0450 - 2.0750 ▲
- AUD/NZD: 1.0900 - 1.1000 ▼
- AUD/CAD: 0.8980 - 0.9120 ▼