AUD finds salvation in Trump concessions

Daily Currency Update

Another wild 24 hours for financial markets as President Trump announced a 90-day reprieve on the introduction of so-called “Liberation Day” tariffs. Just hours after the new tariffs took effect, the President declared a moratorium on all but the 10% baseline tariff, China excluded. Trump retaliated to China’s decision to add another 50% tariff to its earlier 34% tariff, taking the total tariff on US imports since Liberation Day to 84%. The world’s two largest economies continue to price each other out of the market, with new tariff announcements now almost irrelevant. Markets seized on reports broader tariffs will be suspended for 90-days, driving risk assets and currencies higher. Equities surged and the AUD outperformed, climbing off intraday lows of US$0.5915 to session highs just north of US$0.6175. Having borne the brunt of the post-Liberation Day risk off move, the AUD was the biggest benefactor of improving risk sentiment, comfortably outpacing other majors. The AUD traded back above 0.55 against the euro, 0.48 against the pound, while punching back above 90 Japanese yen.

Our attentions remain affixed to tariff headlines as the market rebuilds after the chaos of this last week. Chinese inflation data, US inflation numbers, jobless claims, and commentary from RBA's Governor Bullock, round out the macro docket.