AUD rebound extended as US recession fears back in focus
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Daily Currency Update
The AUD rebound continued on Thursday amid an extended US dollar sell off. After President Trump’s moratorium on tariffs Wednesday, the AUD has bounced back strongly, climbing off lows just above US$0.59 to punch above US$0.60 and extend gains back through US$0.61 and US$0.62, marking session highs above US$0.6240. With trade tensions easing, market focus shifted back to rising fears the US economy is barreling toward recession. Having borne the brunt of the risk-off move following last week’s tariff carnage, the AUD has been one of the main benefactors of the risk recovery, recouping losses and moving back toward levels only marginally below its pre-liberation day levels.Our attentions today remain with tariff headlines as EU officials gather to discuss Europe’s response to President Trump’s tariff agenda. An extended easing in trade tensions should help the AUD maintain supports into the weekend as US PPI data and inflation expectations dominate the macro ticket.
Key Movers
The US dollar fell sharply through trade on Thursday amid growing concern the US economy is barreling toward a recession. With risk assets recovering following President Trump’s moratorium on tariffs, focus shifted back to fears US growth and economic activity has stalled. CPI numbers came in softer than expected in March with both headline and core prints writing short of market estimates, as the cost of tariffs are yet to flow through into the real economy. The USD DXY index fell more than 2%, marking its biggest one day fall since November 2022. The euro surged off 1.0950, pushing above 1.12 to mark intraday highs at 1.1240, while the British pound jumped through 1.29, eyeing a breakthrough 1.30 having touched highs at 1.2991. With the dollar on the back foot, the yen enjoyed a significant upswing as well, forcing the dollar back below 145 to touch session lows at 144.07.Our attentions remain with tariff headlines, as EU finance ministers and ECB president Lagarde meet to discuss if the Trump 90-day reprieve on all but the 10% baseline increase in tariffs is enough to allow the EU to delay its own response. Comments from officials will prove key in shaping the risk narrative into the weekly close. US PPI data and inflation expectations dominate the macro ticket.
Expected Ranges
- AUD/USD: 0.6000 - 0.6300 ▲
- AUD/EUR: 0.5480 - 0.5650 ▼
- GBP/AUD: 2.0700 - 2.1000 ▲
- AUD/NZD: 1.0800 - 1.1000 ▼
- AUD/CAD: 0.8620 - 0.8820 ▲