Written by Steven Dooley, Head of Market Insights, and Shier Lee Lim, Lead FX and Macro Strategist
Aussie lower as elections loom
The Australian dollar was lower over the long weekend ahead of a major week of Australian news that sees the key March-quarter inflation numbers due on Wednesday and the Federal election on Saturday.
The AUD/USD had climbed to four-month highs last week – in line with gains in global equity markets – but the pair eased back from these highs on Friday.
The NZD/USD was also lower on Friday as the kiwi reversed after briefly trading above 0.6000 last week for the first time since November.
Key elections remain in focus in other parts of the world with the Canadian national election to be held on Monday — and expected to see a win for Mark Carney’s Liberal Party.
The Singapore national election is due on 3 May. Lawrence Wong’s People’s Action Party is seen as likely to win.
The USD/SGD was higher on Friday with the pair near two-week highs.
China-US trade talks and China-EU partnerships
A representative for China’s Commerce Ministry stated that “any reports on development in talks are groundless” and urged the US to lift all unilateral tariffs.
US President Donald Trump claimed that his administration has been meeting with Chinese officials on trade.
President Xi Jinping is working to mend fences with the European Union in the meanwhile.
According to a European official quoted by Bloomberg, Xi is getting ready to remove penalties on a number of EU legislators, and EU authorities are thinking about removing tariffs on Chinese electric vehicles.
European leaders may talk about resurrecting an investment treaty and expanding trade with China at a conference scheduled for July in Beijing.
USD/CNH remains around 2% below its recent all-time highs of 7.4290.
USD/CNH has been sitting on support line of 50-day EMA of 7.2834, where USD buyers may look to take advantage.
The next key resistance for the pair remains key psychological level of 7.3000 and 7.3500.
All eyes on inflation and growth data this week
The upcoming week will see inflation data emerge as the central focus across major economies. In Australia, Q1 CPI figures (Wednesday) are expected to show a quarterly rise of 0.8% QoQ and 2.3% YoY, which could provide insight into the Reserve Bank of Australia’s policy trajectory.
Meanwhile, preliminary inflation readings from Germany and France (Wednesday) will offer a closer look at price pressures within the Eurozone, with Eurozone-wide CPI data due Friday. These data points will likely shape expectations around the European Central Bank’s (ECB) next moves.
Additionally, the US will release its Personal Income and Spending (Thursday) alongside the PCE price index—widely regarded as the Federal Reserve’s preferred measure of inflation. These figures will be closely monitored amidst ongoing speculation about the Fed’s future rate decisions.
Growth metrics will also be in focus. The US Q1 GDP preliminary reading (Wednesday) is expected to show annualized growth of 0.4%. The Eurozone will release Q1 GDP estimates as well. This, alongside PMI data from the manufacturing sector in US (Thursday) and across Europe (Friday), will offer further context on the region’s economic momentum.
The Bank of Japan (BoJ) will announce its policy decision on Thursday, with the target rate expected to remain unchanged at 0.5%.
Labour market data from the US (Friday) will be a key highlight, with nonfarm payrolls expected to rise by 123k in April, a notable slowdown from March’s strong 228k reading. The unemployment rate is forecast to hold steady at 4.2%. These figures will provide insight into the resilience of the US labour market amidst tighter monetary conditions.
Aussie, kiwi lower over weekend
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 29 April – 3 May
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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.
