Market News & Analysis

AUD strengthens on FOMC minutes and trade progress

Apr 11, 2019 | Market Update

High-impact economic news:

17:00 EUR German Final CPI m/m
17:45 EUR French Final CPI m/m
23:30 USD PPI m/m
23:30 USD Unemployment Claims

AUSTRALASIA

The Australian dollar has started the Asian session lower after reaching multi-week highs overnight. It follows the release of the FOMC meeting minutes and positive sentiment over a trade deal being reached between China and the United States.

The AUD/USD closed the session at a 6-week high of 0.7170 while the AUD/CAD closed at its highest level since January 16. The Aussie reached a 3.5 month high against the Japanese Yen and a 4-month high against the Euro.

During the Asian session, the AUD has edged slightly lower despite positive economic data out of China. China’s inflation (CPI) and Producer Price Index (PPI) both met expectations for the month of March.

NORTH AMERICA

Overnight, the United States and China agreed to open “enforcement offices” to monitor trade between the two nations, once a deal is reached. The news led many to believe a deal was another step closer to being signed, driving AUD sentiment. On top of this, the release of the FOMC meeting minutes revealed most policymakers expect interest rates in the United States to remain on hold in 2019. Concerns over global economic growth were again echoed in the minutes. Weaker-than-expected inflation data didn’t help the greenback either. In the month of March, Core CPI slowed to 0.1%. As a result, the USD fell to a 2-week low against the Euro and a weekly low against the Japanese Yen.

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