Written by Steven Dooley, Head of Market Insights, and Shier Lee Lim, Lead FX and Macro Strategist
USD stronger across APAC ahead of US retail sales
The Australian and New Zealand dollars – recently higher – turned sharply lower overnight ahead of US retail sales numbers due tonight.
Last month, the US retail sales result was reported at 1.4% for March – the strongest result since January 2023 – as consumers tried to purchase products ahead of the announcement of new US tariffs. Economists are looking at a flat result for the April report.
The US dollar recovered from early losses yesterday to end positive on the day ahead of these key retail sales numbers. The Aussie and kiwi were the hardest hit overnight.
The AUD/USD fell 0.7% with the AUD lower in most other markets. The AUD/EUR fell 0.5% as it dropped from one-month highs while AUD/JPY lost 1.1% as it turned from two-month highs,
The NZD/USD lost 0.6% with NZD/EUR also down 0.5% and the NZD/JPY similarly dropping 1.1% and falling from more than three-month highs
The USD was higher in Asia with the USD/SGD up 0.1% while the USD/CNH was up 0.2% from six-month lows.
Aussie weaker ahead of local jobs
Looking to today’s trade, the early focus will be on Australian jobs at 11.30am AEST.
We anticipate a 20k increase in employment, while the unemployment rate is likely to remain at 4.1%, in the April labour force data.
Monthly job growth has been trending downward, which is in line with lead indications such as vacancy statistics.
From technical lens, the AUD/USD has moved into a consolidation phase, trading between 0.6350 and 0.6520 with around 8% gains from the recent 8 April lows of 0.5915.
The next key support lies at its 50-day EMA of 0.6346.
BoJ’s Uchida expresses concern over US tariff effects; JPY gains
Bank of Japan Deputy Governor Uchida has expressed concern that US tariffs will negatively impact Japan’s economic growth.
He forecasts that the Japanese economy will likely slow to trend growth this year before regaining momentum next year as global economic conditions improve.
Uchida noted that core inflation in Japan may plateau temporarily.
Despite this, he remains optimistic about continued wage growth due to tight labour market conditions.
Regarding FX, the Deputy Governor appeared cautious about yen appreciation, highlighting that a stronger yen tends to harm exports and reduce profits for major manufacturing companies.
USD/JPY has bounced off from its key psychological support of 140. The next key resistance level 149.73 of the 200-day EMA is in plain sight.
Aussie, kiwi turn from highs
Table: seven-day rolling currency trends and trading ranges
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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.
