Markets take pause allowing AUD to maintain recovery
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Daily Currency Update
The Australian dollar tracked a narrow range through trade on Thursday as analysts sidelined major bets amid choppy trading conditions. While the USD was weaker, safe haven alternatives found support and the AUD edged marginally lower as equity prices continue to fall and there remains a cloud of uncertainty surrounding US trade and geopolitical policy. Having touched intraday highs just short of US$0.6370, the AUD bounced between US$0.6320 and US$0.6360 for much of the day and opens this morning smack bang in the middle of the range at US$0.6336. In other news, the AUD marked fresh lows against the euro, slipping below 0.5850 before finding support and continues to trade south of 0.4920 against the GBP.Our attentions remain with US trade announcements, while US non-farm payroll dominate the macro ticket. With concern for US growth prospects rising, we are keenly attuned to labour market performance. A softening in conditions may force the Fed to resume lowering interest rates, focusing on its unemployment mandate at the cost of inflation.
Key Movers
Price action was well contained on Thursday when marked back to the volatility enjoyed through the earlier part of this week. The USD is marginally lower with the DXY index giving up 0.1%. The safe haven Swiss franc and Japanese yen outperformed other majors as risk sentiment faltered amid falling equity prices and ongoing trade and geopolitical policy uncertainty. President Trump confirmed a pause on tariffs imposed on goods from Mexico and Canada that comply with USMCA (United States-Mexico-Canada Agreement). The execution of trade policy today has fostered hopes an all out trade war may be avoided and we continue to watch headlines for guidance into the April 2 reciprocal tariff review.In other news, the ECB lowered its policy rate by 25 basis points. This is the sixth rate cut since June 2024 and reduces the underlying deposit rate to 2.5%. The move was anticipated and ECB president Christine Lagarde offered little by way of new insights into policy makers plans. She noted policy is becomingly meaningfully less restrictive. Markets are pricing two further rate cuts through year end. The cut had little impact on the euro and it continues to trade near 1.08.
Our attentions remain with US trade announcements, while US non-farm payroll dominate the macro ticket.
Expected Ranges
- AUD/USD: 0.6200 - 0.6400 ▼
- AUD/EUR: 0.5820 - 0.5920 ▼
- GBP/AUD: 2.0200 - 2.0400 ▼
- AUD/NZD: 1.1000 - 1.1100 ▼
- AUD/CAD: 0.9000 - 0.9100 ▼