• AUD/USD looks for clear direction after Friday’s losses tested heavy run-up on the weekly basis.
• Market sentiment stays positive amid upbeat US data and a lack of negatives from home.
• Opening of trans-Tasman travel bubble contrasts geopolitical tensions, virus/vaccine headlines.
• US equities again made fresh record highs, the S&P500 up 0.4%. Currencies were mixed, the AUD and NZD underperforming. Bond yields were little changed.
Commodities, Brent crude oil futures fell 0.3% to $66.75, copper fell 1.2%, iron ore rose 0.2% to $177.45, and gold rose 0.7%.
Overnight Currency Ranges
AUD/USD 0.7724 0.7760
EUR/USD 1.1951 1.1995
GBP/USD 1.3717 1.3840
USD/JPY 108.61 108.96
NZD/USD 0.7132 0.7177
USD/CAD 1.2495 1.2559
USD/CNH 6.5202 6.5368
AUD/JPY 84.09 84.37
AUD/NZD 1.0800 1.0838
AUD/USD wavers around 0.7730, keeping Friday’s downbeat performance. The Aussie has looked more fragile in recent weeks, not only firmly rebuffed at 0.80 but in recent days sliding under 0.7600 for the first time since early February. An extension to 0.7500 or below is plausible so long as the US dollar draws support from an economic rebound fuelled by a huge fiscal injection and rapid vaccine rollout.
The US economic numbers, housing and consumer sentiment being the latest, have been strong enough to keep traders hopeful while opening up the Australian economy also flash positive signs for the market..
Also on the upbeat side could be the travel-bubble restart between Australia and New Zealand starting today.
No major data/events at home can keep the pair at the mercy of risk catalysts.
Event Risk Data Today
New Zealand: Market expecting some weakness in the March Business NZ PSI due to an increase in Alert Levels over the month (last: 49.1).
China: China’s economic growth surged to 18.3 per cent over a year ago in the first quarter of 2021 after factory and consumer activity returned largely to normal following the coronavirus pandemic.
The figures reported on the weekend were on par with early 2020, when the world’s second-largest economy fell into its deepest contraction in decades.
US: housing starts in March beat expectations, rising 19.4%m/m (vs +13.5% expected), from a upwardly revised Feb (1.457m from 1.421m). Building permits also rose a more than expected, by 2.7% (vs +1.7% expected) to 1.766m. A rebound was expected from weather-affected February.