Australian dollar (AUD) buoyed by RBA decision
The Australian dollar (AUD) managed to gain ground yesterday as the Reserve Bank of Australia (RBA) left interest rates unchanged at its latest policy decision.
Although RBA Governor Michele Bullock said that the bank stood ready to cut rates if a global trade war hits the Australian economy, she added that the country was ‘well placed’ to weather the potential economic fallout.
Turning today, trade war jitters could weigh on the risk-sensitive ‘Aussie’ as a barrage of US tariffs are due to come into effect.
New Zealand dollar (NZD) wavers amid shifting mood
The New Zealand dollar (NZD) was initially subdued yesterday amid a risk-averse market mood, although an improvement in sentiment during European trade helped the ‘kiwi’ edge higher in the evening.
Tariff concerns could see the New Zealand dollar struggle today, particularly if retaliatory measures from some countries threaten to escalate global trade tensions.
Pound (GBP) slips as tariff exemption hopes fade
The pound (GBP) weakened yesterday as it became apparent that the UK would not be exempt from the initial tariffs set to be announced by the US today.
GBP investors had hoped that ongoing UK-US trade talks would result in a last-minute deal to avoid tariffs on trade, so this news dented Sterling.
With no notable UK data due out today, wider market trends could continue to impact the pound. Any hopes that the British government could negotiate a favourable deal with the White House in the near future may aid GBP.
Euro (EUR) dips as inflation cools
The euro (EUR) fell against many of its peers yesterday as cooler-than-forecast Eurozone inflation fuelled European Central Bank (ECB) interest rate cut bets.
The bloc’s latest consumer price index showed headline inflation cooling from 2.3% to 2.2% in March, rather than holding steady, and core inflation easing from 2.6% to 2.4%, versus the forecast 2.5%.
Today, transatlantic trade tensions could infuse EUR with volatility. If the EU vows to retaliate against US tariffs, the single currency could come under pressure.
US dollar (USD) uncertain as Trump tariffs looms
The US dollar (USD) was choppy yesterday, wavering higher against weaker peers but struggling elsewhere, as markets braced for Trump’s incoming tariffs.
A contraction in factory activity in March, as reported in the latest ISM manufacturing PMI, then dented USD in the evening.
Looking ahead, USD could face notable volatility today as markets respond to sweeping US tariffs. A risk-off mood could support the ‘greenback’, while worries about a US recession could create headwinds for the American dollar.
Canadian dollar (CAD) mixed as oil prices wobble
The crude-linked Canadian dollar (CAD) traded without a clear trajectory yesterday as wavering oil prices triggered choppy movement in the ‘loonie’.
CAD exchange rates could face pressure today if fresh US tariffs add to growing concerns over Canadian exports to the US – its largest trading partner.
Data releases
08:00 AUD Ai Group Industry Index (Mar)
20:30 EUR ECB Schnabel Speech
22:15 USD ADP Employment Change (Mar)