The Australian dollar is currently mixed. AUD is currently strengthening against the euro and the yen, while selling off against the US dollar. While the currency staged a small rally following better-than-expected growth in house prices, China-related concerns have kept gains in check. As we wrote in our euro daily update earlier today, the Trump administration's tariffs are being aimed at China. The Office of the US Trade Representative has offered to withhold tariffs on steel and aluminum exports to the US in exchange for cooperation against Chinese trade practices. Given Australia's reliance on exports to China, the currency is weakening. Looking at other financial markets, China-sensitive assets such as copper remain weak. Our medium-term outlook on the Australian dollar is neutral, while our short-term outlook is bearish.
AUD/USD is down slightly today and trading just above 0.770. EUR/AUD is down and trading above 1.5930. GBP/AUD is down slightly and trading above 1.8150.
Looking at economic data relating to the Australian dollar this week, we'll see the RBA's meeting minutes and changes in employment. Year-over-year house prices (5% vs. 3.9% expected) were higher expectations. The RBA's meeting minutes suggested that the Bank remains on hold. RBA Assistant Governor Bullock made no comments relating to monetary policy. Tomorrow, we'll see the Westpac leading index. On Thursday, we'll see employment changes for February and the unemployment rate. Last week, new home loans were below consensus estimates.