Written by Steven Dooley, Head of Market Insights, and Shier Lee Lim, Lead FX and Macro Strategist
Markets inch higher ahead of US tariff announcement
Global markets edged higher overnight ahead of what is likely to be a massive 24 hours with US president Donald Trump planning to announce a new wave of tariffs overnight.
President Trump has marked 2 April as the key date for an announcement around reciprocal tariffs. Of course, the announcement, due Thursday morning APAC time, might be delayed, shifted or more positive than expected.
In recent days, media reports have suggested the focus will be on a country-by-country basis with tariffs of at least 20% reported overnight.
While equity markets and risk-sensitive currencies like the Australian dollar have been mostly weaker over the last fortnight, we saw a small rebound overnight, led by a 0.4% gain in the US’s S&P 500.
The AUD/USD gained 0.6% as it climbed from one-month lows while NZD/USD gained 0.5% as it also rebounded from one-month lows. In Asia, the USD mostly gained, with the USD/SGD up 0.1% and USD/CNH up 0.3%.
RBA holds steady, citing inflation uncertainty
No joy for Australian mortgage holders yesterday, with the Reserve Bank of Australia maintaining the cash rate at 4.10% on Tuesday as expected.
The central bank highlighted that labour markets remain tight despite February’s job losses. It also pointed to heightened global uncertainty, noting that US tariffs are affecting confidence—an impact that could intensify if tariffs expand or other countries retaliate.
The RBA stated that inflation could move in either direction.
AUD/USD reaction was muted after the RBA’s decision and press conference but the AUD/USD ended higher on the day in line with gains in global markets.
That said, the AUD/USD, AUD/CNY, AUD/EUR are all near the lower end of their 30-day trading range, signaling ongoing selling pressure in these markets.
For AUD/NZD, it is in the middle of the 30-day trading range, but AUD buyers may also look to capitalize on the pair.
Japanese yen higher as Tankan Survey indicates May BoJ live
Looking to Japan, the Tankan manufacturing index in Q1 was 12 compared to 14 before, while the non-manufacturing index was 35 compared to 33 previously.
While activity slowed, the results of the survey indicate a higher inflation expectation for all company categories, which supports the argument that the May BoJ will be live.
JPY has strengthened against USD circa 5% YTD, and it is the top three performing G10 FX YTD.
USD remains supported as Fed maintains “moderately restrictive” stance, with FOMC members emphasizing caution on rate cuts due to upside inflation risks.
Looking forward, USD/JPY may look to breach next resistance levels of 50-day EMA of 150.78 and 200-day EMA of 151.44.
Similarly for SGD/JPY, a move higher could potentially breach the next resistance levels of 50-day EMA of 112.42 and 200-day EMA of 113.05.
USD higher in Asia ahead of “Liberation Day”
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 31 March – 4 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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