Written by Steven Dooley, Head of Market Insights, and Shier Lee Lim, Lead FX and Macro Strategist
Sharemarkets fall, but FX more muted
Global markets were lower on Thursday morning after US president Donald Trump signed-off on a 25% tariff on auto imports into the US
US markets had finished trading when the announcement was made but stock market futures fell on the news. Earlier, US equity markets had a bad day, with the S&P500 down 1.2% and the Nasdaq losing 2.0%.
In FX markets, the response was more muted, with currency markets showing signs of “tariff fatigue”.
The AUD/USD was flat overnight and fell only 0.1% on the automobile tariff announcement.
Earlier, Australia’s February CPI decreased to 2.4% year-over-year, with a trimmed mean of 2.7% year-over-year. On the CPI print, the AUDUSD was first dropped down below 0.6280, but it soon reversed the move.
The kiwi was also mostly steady overnight, and down moderately after the tariff announcement.
In Asia, the USD was mostly higher, boosted by gains in the USD/JPY after this week’s Bank of Japan minutes.
The USD/SGD and USD/CNH both climbed to three-week highs.
Trump claims that in his tariff push, he doesn’t want “too many” exceptions.
President Donald Trump of the United States intends to restrict exemptions to his tariff campaign.
His statement that “not too many, not too many exceptions” would be difficult to get was published by Bloomberg.
Although there is still a lot of uncertainty, the market is positive on the DXY price action.
Looking at USD/JPY, following a recent test of 151.00, it should indicate a technical resistance of 151.50-70.
USD/JPY’s RSI indicator is at 53 level and there may be potential for USD/JPY to edge higher, supported by relative yields shown in correlation chart.
Improved perceptions of China bodes well for CNH
Looking at Asia, the Chinese government’s announcement of a number of policy changes and the surge in Chinese stocks have enhanced perceptions of China, as seen by the rise in exporters’ FX conversions.
The PBoC has been able to better control RMB price movement as a result of this development.
USD/CNH is now at three-week highs with AUD/CNY also near three-week highs.
USD/CNY and AUD/CNY are slightly above its 30-day average trading ranges, where CNY buyers may look to take advantage at key resistance levels soon at 7.30 and 4.59 respectively.
Similarly for USD/CNH at 7.30 key resistance level.
Euro extends losses after last month’s monster gains
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 24 – 29 March
All times AEDT
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