SYDNEY: The Australian and New Zealand dollars regained their composure on Thursday after briefly wobbling over the US announcement of tariffs on all auto imports, showing relative resilience as the market grapples with uncertainty.
The Aussie rose 0.2% to $0.6313, after dipping 0.1% on Wednesday to a low of $0.6298.
The next hurdle on the upside will be Wednesday’s high of $0.6330, while support sits around $0.6260.
The kiwi dollar also gained 0.2% to $0.5740, after finishing Wednesday largely unchanged.
It has support at $0.5680 while resistance is at $0.5760.
Australia, NZ dollars go sideways after a week of struggle, budget in focus
Late on Wednesday, US President Donald Trump announced plans for long-promised 25% tariffs on automotive imports that are set to go into effect on April 2, but said reciprocal tariffs on all countries, also planned for April 2, will be “very lenient”.
The US dollar climbed to a three-week top but retreated slightly on Thursday. Wall Street futures dipped in early Asian trade but managed to recoup those losses, following the market’s sharp fall on Wednesday.
The two Antipodean currencies held up relatively well, considering that they are often sold as a proxy for risk.
The Aussie also weathered a downside surprise in domestic inflation data on Wednesday, which some economists said has made a rate cut more likely in May.
The Reserve Bank of Australia is widely expected to stand pat at its meeting next Tuesday. “We expect an on-hold decision to be accompanied by a more dovish stance.
And we expect a message that indicates if the Q1 25 trimmed mean CPI plays ball then a May interest rate cut will be firmly on the table,“ Gareth Aird, head of Australian economics at the Commonweath Bank of Australia, said in a note.
The market for now has priced in a 66% chance of a cut in May.
Next up on the data front is the Federal Reserve’s preferred gauge of inflation - the Personal Consumption Expenditures Price Index - which is due on Friday.
A hot reading could further delay policy easing by the Fed amid tariff-related risks.
Analysts expect the core measure of the index to come in at a monthly rise of 0.3%, unchanged from January.
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