AUD/USD TRADING HIGHER DESPITE USD STRENGTH AS COMMODITIES HOLD VALUE
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.
AUD/USD is trading higher in the 0.6430s at the start of the week as Middle East tensions ease and commodities hold their value.
The Australian Dollar (AUD) tends to decline during periods of uncertainty, unlike the US Dollar (USD) which has safe-haven qualities, so the unwinding of geopolitical risk helps AUD more than USD.
Israel’s counter-attack against Iran led to a sudden spike in the fear index on Friday and a resulting new low for April in AUD/USD at 0.6362. The Israelis fired a warning shot at a nuclear facility near Isfahan. The strike could have set off a thermonuclear explosion but in the end didn’t, and Iran has not retaliated. As a result, markets have settled back down on Monday, leading to renewed upside for the Aussie.
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