AUD/USD trades marginally higher versus the USD on easing Middle East tensions. Higher commodity prices, especially amongst metals of which Australia exports are also supportive. Aussie CPI data for Q1 and US PCE inflation data are likely to be the main movers in the week ahead. The Australian Dollar tends to decline during periods of uncertainty, unlike the US Dollar which has safe-haven qualities, so the unwinding of geopolitical risk helps AUD more than USD.
The supportive effect may not last, however, since Iron Ore, which is Australia’s largest export, could be peaking and about to roll over. “Iron ore markets showed some signs of peaking after the sharp ruup through April. The May SGX contract is up $1.15 from the same time Friday at $115.90 while the 62% Mysteel index is down 35c at $116.90,” says Westpac.
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Source: DailyFX - 🏆 305. / 63 Read more »
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