The Australian dollar is strengthening against all major currencies today. AUD is currently the strongest against safe havens including the Japanese yen and the US dollar. Yesterday, the Australian dollar sold off during US market hours, alongside riskier assets such as stocks and commodities. Today, the currency is rebounding thanks to improving risk sentiment.
Turning to the latest news and events, the Reserve Bank of Australia kept rates on hold as expected. Changes to the RBA's statement were also fairly limited. While the currency didn't see much of a reaction immediately following the event, AUD has since moved higher. Looking at a longer-term chart of AUD/USD, the pair remains in a bearish trend. As global growth starts decelerating, while China-related risks rise, the currency is more likely to keep selling off. Our short-term and medium-term outlook on the Australian dollar remain bearish.
AUD/USD is up today and trading just above 0.7690. EUR/AUD is down and trading above 1.6010. GBP/AUD is down and trading above 1.8290.
Looking at economic data from Australia this week, important events include an RBA meeting and announcement relating to retail sales and the trade balance. Year-over-year TD Securities inflation for March (2.1%) came in line with previous figures. The AiG performance of manufacturing index (63.1) met expectations. The RBA kept rates on hold, while maintaining its current stance on future monetary policy. The Bank is expected to remain on hold. The RBA commodity index figures for March (-2.1% vs. -0.1% expected) missed expectations by a significant margin. Tomorrow, we’ll see retail sales and building permits. Finally, on Friday, we’ll see the AiG performance of services index and the trade balance. Last week, HIA new home sales were ahead of expectations.