AUD range bound as tariff uncertainty drives direction
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Daily Currency Update
The Australian dollar edged higher on Thursday yet remains well and truly entrenched within its recent narrow range. Tariff turmoil again drove direction, with the AUD drifting toward supports at US$0.64 after the US Court of International Trade ruled much of the Trump Administrations' liberation day tariffs were unlawful. The USD surged in response, yet gains were short lived as the US court of appeals stepped in blocking the need for immediate action prior to appeals being lodged and heard. With US GDP data missing the mark and jobless claims rising the USD retreated overnight, allowing the AUD to recover the days early losses and move back toward US$0.6450. Having touched intraday highs at US$0.6458, the AUD settled nearer US$0.6440 leading into this morning’s open. While the AUD closed higher on the day it lagged gains won by other majors and continues to underperform when marked back to the euro and GBP. The AUD traded sharply lower against both crosses, falling below 0.5650 against the euro and 0.4780 against the pound.Our attentions remain with tariff headlines as EU and US inflation data dominate the macro ticket into the weekly close.
Key Movers
There is plenty to digest this morning as markets react to softer US data and growing uncertainty surrounding the Trump administrations tariff agenda. The US Court of International Trade (CIT) ruled a unanimous 3-0 decision that the President has wrongly invoked emergency laws within the International Emergency Economic Powers Act to justify many of the liberation day tariffs. As a result, the administration was given 10 days to comply with a mandatory halt on the collection of all tariffs issued under the act. The US dollar surged in response, advancing through the APAC session before the Federal Court of appeals stepped in, granting Trump and his administration a lifeline by ruling the tariffs can remain in place until the appeal is heard. While the court of appeals may uphold the CIT ruling, there are other avenues the President can pursue in implementing his tariff agenda and this latest roadblock doesn’t necessarily mean an end to tariff turmoil. Market uncertainty remains elevated and with Q1 GDP revisions disappointing analysts and jobless claims rising the dollar retraced gains closing lower on the day. Having climbed above 146 against the yen the USD is now trading back below 144.50, while the euro surged back above 1.13 and 1.1350 and sterling jumped back above 1.35.Our attentions today remain with US tariff headlines, while Eurozone CPI data, US PCE inflation and Japanese retail sales numbers headline the macro ticket into the weekly close.
Expected Ranges
- AUD/USD: 0.6400 - 0.6530 ▲
- AUD/EUR: 0.5600 - 0.5700 ▼
- GBP/AUD: 2.0800 - 2.1000 ▲
- AUD/NZD: 1.0750 - 1.0850 ▲
- AUD/CAD: 0.8850 - 0.8950 ▲