Australian one dollar coins
A handful of Australian one dollar coins is shown in Sydney, February 18, 2004. Reuters/Tim Wimborne

Bell FX Currency Outlook: The Australian Dollar is down over 1 cent overnight, retesting the 75 cent level.

Australia: ‘Risk-off’ was very much theme for markets overnight. Equity indices are lower, bond yields up and risk currencies (such as the AUD) down. The JPY was the best performer of the G10, while the AUDJPY pair was the worst performing, down 2.5% from 83.70 to 81.30. Not helping the AUD were weaker commodity prices, with copper taking a hit upon the strongest rise in LME copper stocks in five months. The AUD is now retesting the 75 cent level (against the USD), which has recently been a key level of support. With the exception of a couple of ‘false breaks’ the AUD hasn’t traded significantly below the 75 figure since March 16th. It is another day with no domestic data releases so it will be again left to offshore themes to drive direction. With the recent strength in the JPY, Japan’s trade balance data this morning will be watched with interest.

Majors: The EUR sold off following the release of minutes from the most recent ECB meeting, which saw interest rates cut to new record lows (- 0.4%), and a 33% expansion in its quantitative easing program to EUR80bn per month. The minutes confirmed that no further cuts were expected but there is still scope to do more if required, with the bank noting “the Governing Council would not rule out future cuts in policy rates, as new shocks could change the outlook for inflation”. There was little other data of note overnight but the GBP continues to soften over ‘Brexit’ fears. The pound is down 0.74% against the USD and 1% against the AUD (now down 13% this year since the January high). There isn’t too much to get excited about on the data front tonight; German and UK trade balance, US housing starts and a speech by NY Fed president Dudley are the highlights.

Economic Calendar 08 APR

  • US Fed’s Yellen in NY, with Greenspan, Bernanke and Volcker
  • UK UK Trade Balance
  • CA Employment/Unemployment Rate
  • US Wholesale inventories/Sales MoM

Bell Fx

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