23 April 2021 - AUD/USD stays pressured after printing the heaviest losses in 12 days

Market Headlines

AUD/USD stays pressured after printing the heaviest losses in 12 days. AUD/USD fades bounce off the week’s low, flashed a few minutes back, as declining to 0.7703 during the early Friday morning in Asia. The Aussie pair registered the heaviest daily losses the previous day as risk-off mood superseded welcome economics from here and the US as well as the European Central Bank’s (ECB) cautious optimism.

Fears of US President Joe Biden’s 40% capital gain tax for wealthier Americans dominated the late Thursday moves. In doing so, the traders ignored upbeat prints of US Jobless Claims, Chicago Fed Manufacturing Index and a pullback in Existing Home Sales. Upbeat Aussie data couldn’t recall bulls, ECB passed unnoticed.

Further, China’s dislike for Australia’s rejection of the “Belt and Road” deal also adds to the risk-off catalysts.

Commodities: Brent crude oil futures rose 0.4% to $65.55, copper fell 0.5%, and gold fell 0.6%, while iron ore fell 1.1% to $183.70.

Overnight Currency Ranges

AUD/USD 0.7691 0.7764

EUR/USD 1.1994 1.2070

GBP/USD 1.3825 1.3948

USD/JPY 107.815 108.23

NZD/USD 0.71475 0.7212

USD/CAD 1.2473 1.2535

USD/CNH 6.4802 6.4994

AUD/JPY 83.13 83.86

AUD/NZD 1.0750 1.0790

AUD Thoughts

AUD/USD traded to a low of 0.76915 overnight with demand still expected ahead of 0.7660 while offering interest has likely increased above 0.7770.Although risk catalysts are in the driver’s seat, the preliminary readings of Commonwealth Bank’s (CBA) activity figures for April will also be important to follow for fresh directions.

Event Risk Data Today

Europe: April Market manufacturing and services PMIs will be released for the Euro Area and the UK.

UK: GFK consumer sentiment has lifted off its pandemic lows and is expected to improve to -12 in April. March retail sales should advance 1.5%, with further strength ahead as lockdowns unwind and pent-up demand drives spending. March public sector net borrowing is set to rise to GBP 21.3bn on the record peacetime deficit.

US: Both the April Market services (market f/c: 61.5) and manufacturing (market f/c: 61.0) PMIs will point to the brisk pace of the US’ economic recovery. March new home sales should see some catch up after a weather disrupted February (market f/c: 14.2%).