Written by Steven Dooley, Head of Market Insights, and Shier Lee Lim, Lead FX and Macro Strategist
Aussie best as global markets surge
Global markets roared higher in a historic move overnight after US President Donald Trump announced a 90-day pause in the implementation of the most severe tariffs on the majority of trading partners. However, President Trump raised tariffs on China to 125%.
The benchmark S&P 500 jumped a massive 9.5%. This was the index’s eighth-best percentage performance in history and the best outside of the Great Depression and Global Financial Crisis eras.
In FX markets, the Australian dollar led the charge higher, with an incredible 3.2% gain, moving the market back towards key resistance at 0.6185.
The NZD/USD also gained strongly, up 2.0%, with this market near resistance at 0.5680.
The moves in Asia were more muted with the USD/JPY up 0.9% after the decision.
The USD/SGD fell 0.9% while the USD/CNH turned sharply, down 1.1%, as the market quickly fell from the all-time highs seen on Wednesday morning.
Asia positioning as US exceptionalism declines
Will the US economy’s recent outperformance fade in the face of tariffs and trade uncertainty? Here are some possible ramifications for Asia markets as the “US exceptionalism” narrative fades.
China, ASEAN, and India have the least connected stock markets with the US, while Korea, Taiwan, and Japan have the most correlation.
It’s not surprising that MSCI China has outperformed year-to-date despite being at the centre of the tariff storm since China authorities’ choice to deleverage the economy a few years ago has delinked Chinese stocks from the US-led global asset cycle.
The attention yesterday was on China’s offshore RMB as the CNH fell to its lowest level since 2010, but the Chinese currency later recovered.
The next key support for USD buyers lies with 50-day EMA 7.2816 for USD/CNH.
FX remains key on tariff talks says Japan’s Kato
According to Bloomberg, Japan’s Finance Minister Katsunobu Kato said in parliament that currency may come up in trade negotiations with the US.
According to Kato, tariffs that are based on “brinkmanship” have the potential to depress Japan’s economy.
USD/JPY rebounded from six-month lows at 144.00 – this level now becomes support. Next key resistance levels are 50-day EMA 149.91 and 200-day 151.17.
Aussie, kiwi surge overnight
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 7 — 11 April
All times AEDT
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*The FX rates published are provided by Convera’s Market Insights team for research purposes only. The rates have a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer.
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