Written by Steven Dooley, Head of Market Insights, and Shier Lee Lim, Lead FX and Macro Strategist
China trade news lifts Aussie, CNY
The Australian dollar was higher on Monday morning helped by a potential thawing in trade relations between the US and China while a strong win for Australian prime minister Anthony Albanese’s Labor party also boosted sentiment.
The AUD/USD was up 0.8% on Friday and has followed this gain with another 0.3% lift on Monday. The moves have driven the AUD/USD to the highest level in five months.
In other markets, Friday’s comments from China’s Commerce Ministry, saying it was open to trade takes if the US showed “sincerity”, helped currencies around the region.
Most notably, the USD/CNH plunged, down 0.9%, as it dropped to six-month lows.
The NZD/USD was also higher, up 0.7%.
In Singapore, the USD/SGD dropped below the 1.3000 level, helped by the trade news while a strong election performance from the long-established People’s Action Party government also lifted the SGD.
Australian trade numbers also help AUD
The Aussie was also helped by better trade data.
Australia posted the highest three-month run of exports to the US as President Donald Trump’s tariff policies triggered a rush to buy gold, resulting in a goods surplus of AUD4.1 billion with the US in the three months leading up to March, after a deficit of AUD6.2 billion in the previous year, according to Reuters.
Due to an almost 12% recovery in iron ore and a 26% increase in non-monetary gold shipments, overall exports increased 7.6% m/m in March after declining 3.6% the previous month.
A decline in capital goods was the primary cause of the 2.2% m/m decline in imports.
AUD/USD has bounced off its lows from 0.5915 on 9 April with gains more than 8% since.
The next key support for the pair rests at 21-day EMA of 0.6351.
Central bank decisions and PMIs in focus
Central bank decisions take centre stage this week.
The week features two major central bank meetings, with the Federal Reserve’s FOMC decision and the Bank of England’s policy announcement on Thursday. The Fed is widely expected to maintain its target range at 4.5%, while markets anticipate a potential 25bps cut from the Bank of England to 4.25% from the current 4.50%.
Global PMI readings dominate the calendar. The week brings final April PMI figures across major economies, offering insights into business activity trends. Tuesday features China’s Caixin services PMI, followed by final PMI readings from France, Germany, and the broader Eurozone, alongside the UK’s services PMI. The UK construction PMI on Wednesday completes the global PMI picture, providing a comprehensive view of business conditions across regions.
Industrial production data to gauge manufacturing health. Several key economies report manufacturing output figures, starting with France on Tuesday (consensus +0.3% MoM). Germany follows with factory orders on Wednesday (expected +2.1% MoM) and industrial production on Thursday (forecast +1.0% MoM). The UK rounds out the week with manufacturing and industrial production readings on Friday, providing a comprehensive view of global manufacturing conditions amid ongoing economic uncertainties.
Labor market and trade data provide growth insights. The US trade deficit is expected to narrow slightly to $119.5 billion (from $122.7 billion) when reported Tuesday.
New Zealand employment figures arrive Wednesday morning. Canada’s employment figures cap the week on Friday, with forecasts showing a 25,000 job gain following the previous month’s 32,600 decline. The unemployment rate is anticipated to hold steady at 6.7%. These reports will offer valuable context on economic resilience as central banks weigh policy adjustments.
Aussie higher across markets
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 5 – 10 May
Have a question? [email protected]
*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.
Leave a Reply