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