Written by Steven Dooley, Head of Market Insights, and Shier Lee Lim, Lead FX and Macro Strategist
US equities pause after rally, USD finds support
The US equities market took a breather after recent gains, while Treasuries attracted buyers as the USD maintained most of its intraday advances amid limited major headlines.
The Canadian dollar weakened after softer-than-expected CPI data, supporting expectations that the Bank of Canada will cut rates by 25bps today.
President Trump is awaiting China’s next move in trade negotiations, with the anticipated Trump-Xi phone call yet to be confirmed, suggesting that de-escalation remains distant.
US-EU trade talks are proceeding slower than planned but remain ongoing, alongside negotiations with India, Japan, and other countries.
Today’s focus in Asia will be on Chinese industrial production, retail sales, and GDP data, alongside UK CPI.
Overnight, Antipodeans were up with NZD/USD gained 0.4% and AUD/USD gained 0.3%.
USD/CNH up 0.2%, and USD/SGD was up 0.3%.
RBA minutes: Wary of further rate cuts
This morning, the minutes of the RBA’s policy meeting from March 31 to April 1, which took place right before US Liberation Day, were made public.
As a result, the possible effects of the higher-than-expected tariffs are not mentioned in the minutes.
“Weaker global demand and the possibility of trade diversion away from the US could reduce inflation in Australia, but a larger exchange rate depreciation or more substantial global supply disruptions could increase inflation,” the RBA stated, seeing two-way risks to inflation.
This supports Governor Bullock’s remarks from last week that patience is required for future rate action and for assessing supply and demand globally.
The May RBA meeting is pricing cuts of 32 basis points.
The markets will be looking to the key resistance level of 200-day EMA of 0.6414 for AUD/USD.
US Empire manufacturing exceeds expectations
In April, the US New York Fed Empire manufacturing index increased from -20 to -8.1, above the expectation of -13.5.
The underlying data indicates lower employment but increasing inflationary pressures. In six months, the predicted prices paid increased from 58.2 to 65.6.
Meanwhile, the anticipated six-month workforce dropped from 8.2 to 3.4.
Looking at APAC FX, USD/SGD has rebounded today from the low end of the 30-day trading range, as we’ve highlighted in yesterday’s Daily Updates.
USD/SGD is now near five-month lows. USD buyers may look to take advantage, with the next key resistance for USD/SGD at 200-day EMA of 1.3391.
Antipodeans retreats from the top end of trading range
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 14 – 18 April
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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.
