Aussie Falls on RBA Statement, Budget in Focus

AUD

The Australian dollar lost ground against rivals following the Reserve Bank of Australia monetary policy meeting. The bank left interest rates unchanged at 1.5% while confirming that the downside risks to the economy have increased recently, and the growth has slowed. Market participants await the release of the annual budget as a tax cut for households and business could have a slightly positive impact on the currency. The AUDUSD dropped to a low of 0.7065, and the EURAUD rose to a high of 1.5840.

USD

The dollar index which measures the greenback against a basket of major currencies resumed the rally higher following strong manufacturing data. DXY rallied to a three-week high of 97.46. The greenback was a bit fragile on sluggish retail sales figures. However, the ISM Manufacturing PMI came in at 55.3, rebounding from the lowest levels since January 2017, to signal that the manufacturing sector is picking up again. On the other hand, the US treasury yields advanced with the 10-year yields rising to a ten-day high of 2.508%. The USDJPY extended gains towards a high of 111.46, and the EURUSD tumbled further to a three-week low of $1.1192.

Equities

Major US stock index futures added to their gains rising to a six-month high following strong manufacturing data from the United States and China. The upbeat Caixin manufacturing PMI and better-than-expected ISM manufacturing PMI eased investors' woes over the global economic outlook and sparked their risk appetite. The Dow Jones Industrial Average futures climbed to a high of 26288, the S&P500 futures advanced to 2873, and the Nasdaq futures jumped to a ten-day high of 7506.

Metals

Gold prices edged lower on enhanced risk appetite and a strong dollar. The gold ounce traded at a three-week low of $1285, and the silver ounce dropped to a low of $14.97. Meanwhile, palladium recovered for the second consecutive day to hover near the high of $1420.

Oil                                                                                    

Oil prices soared following strong manufacturing data. The upbeat manufacturing reports from China and the United States boosted the prospects for higher oil demand in 2019. On the other hand, the ongoing Venezuelan turmoil and the OPEC-led supply cuts continue to provide support to oil prices. Moreover, a US official said yesterday that Washington is planning more sanctions on Iran as the waivers granted by the US expire in May. The West Texas Intermediate crude futures jumped to a five-month high of $62.01, and Brent futures edged higher to $69.47. The American Petroleum Institute will report the US weekly crude oil stock later today.

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