Australian dollar Appreciated as the ASX 200 Index gained Momentum.
On Thursday, the Australian Dollar (AUD) rose for the second day in a row. The Decrease in the US Dollar (USD) provides support for the AUDUSD pair. However, mixed Australian job data appears to be putting Downward pressure on the AUD.
The Australian dollar gains Momentum as the ASX 200 index continued to rise on Thursday. The local equities market is boosted by advances in mining firms. Which are supported by higher metals prices. This good momentum continues despite US markets losing ground overnight on fears. That the Federal Reserve (Fed) will postpone rate reduction indefinitely.
The decrease in US Treasury yields adds to the pressure to undermine the US dollar.
The US Dollar Index (DXY) is losing ground. Subdued US Treasury yields are the primary driver. This US Dollar fall is exacerbated by fresh selling pressure and a general risk-on mentality in the market. Investors await the release of weekly Initial Jobless Claims and Existing Home Sales later on Thursday. Which may provide additional insight into the status of the US economy and potentially influence the direction of the US Dollar.
Daily Market Movers: The Australian Dollar continues gains amid mixed labour statistics.
Australia’s Employment Change reported -6.6K in March, compared to the projected 7.2K and 117.6K the previous month.
In March, Australia’s unemployment rate grew by 3.8%, which was lower than projected at 3.9% but higher than the previous figure of 3.7%.
US President Joe Biden proposes increasing the current 7.5% tariff rate on Chinese steel and aluminum.
On Wednesday, US President Joe Biden spoke in Pittsburgh, the center of the American steel industry, highlighting the importance of increasing pressure on China’s steel sector. He has asked US Trade Representative Katherine Tai to propose raising the current 7.5% tariff rate on Chinese steel and aluminum, according to CBS News.
Loretta Mester, President of the Federal Reserve Bank of Cleveland, stated on Wednesday that inflation has exceeded forecasts, and the Fed needs additional confidence before affirming the sustainability about 2% inflation. She also noted that monetary policy is well-positioned, with the option of interest rate cuts if labor market conditions deteriorate.
Fed Governor Michelle Bowman said on Wednesday that inflation is slowing and could stall. Bowman also stated that monetary policy is now tight, and its sufficiency will be assessed with time.
The Federal Reserve’s Beige Book study of regional business contacts shows that the US economy has “expanded slightly” since late February. Furthermore, firms reported increased difficulty in passing on higher expenses.
In March, US building permits (MoM) decreased to 1.458 million, compared to expectations of 1.514 million and 1.523 million the previous month. Housing starts fell to 1.321 million MoM from 1.549 million, falling short of the anticipated 1.480 million.
