Written by Steven Dooley, Head of Market Insights, and Shier Lee Lim, Lead FX and Macro Strategist
Aussie unfazed by election news
The Australian dollar inched higher this morning in a muted reaction to the news of an Australian election to be held on 3 May.
Australian prime minister Anthony Albanese followed this week’s federal budget, which featured tax cuts, energy hand-outs and university loan relief, with the rapid announcement of an election in May.
The Aussie was little moved by the announcement with the AUD/USD still trading in the tight range between 0.6200 and 0.6400 that has dominated price action for most of the March quarter.
Global shares weaken further on trade worries
In other markets, the focus remains on US trade policy, with US president Donald Trump’s so-called “Liberation Day” of tariff announcement due on 2 April.
US shares were lower with the Dow Jones down 0.4%, S&P 500 down 0.3% and Nasdaq losing 0.5%.
The US dollar was down with European currencies the best performers. The GBP/USD gained 0.5% while EUR/USD gained 0.4%.
Across APAC, the AUD/USD was up 0.1% while NZD/USD climbed 0.2%.
The USD/SGD and USD/CNH both fell from three-week highs.
USD PCE in focus
Looking forward, the focus is on tonight’s US PCE result.
The February personal consumption and expenditure reading – the Federal Reserve’s preferred measure of inflation – is forecast to remain steady at 2.5% in annual terms while the core reading is expected to rise from 2.6% to 2.7%.
The number is key for the Fed’s next move on interest rates – especially after the Fed raised inflation forecasts at last’s week’s policy decision, making US rate cuts less likely. The Fed is increasingly concerned about inflation as seen in the chart below.
US PCE is due at 11.30pm AEDT.
Commodities extend gains, led by gold
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 24 – 29 March
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.