Australian Dollar to US Dollar (AUD/USD) Exchange Rate Forecast to Tick Lower despite Positive Australian Data

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United States Dollars (USD)

The Australian Dollar to US Dollar (AUD/USD) exchange rate softened by around -0.22% at the start of Tuesday’s European session.

Although Australian economic data printed positively, the ‘Aussie’ (AUD) softened versus most of its major rivals. This can be attributed to the hangover from particularly weak trade data out of China. Additional losses are as a result of the lack of demand for high-yielding assets with geopolitical tensions in Europe dampening trader risk-appetite.

The US Dollar, conversely, strengthened despite disappointing domestic data. The US Monthly Budget Statement declined beyond expectations, but demand for safe-haven assets saw the ‘Greenback’ (USD) advance versus many of its major peers.

The Australian Dollar to US Dollar (AUD/USD) exchange rate is currently trending in the region of 0.7566.

Australian Dollar (AUD) Exchange Rate Weakens on Market Sentiment

Given that Australia has a particularly close trading relationship with China, the ‘Aussie’ is often sensitive to China’s economic data. In particular, trade data from the Far East has a marked effect on the South Pacific asset. With China’s trade surplus narrowing well beyond expectations; it is unsurprising that demand for the ‘Aussie’ is still damp.

However, the Australian Dollar downtrend will be welcomed by Reserve Bank of Australia (RBA) officials who have been complaining about ‘Aussie’ overvaluation for some time. It is a particularly positive sign if the South Pacific asset softens despite positive economic data.

The ANZ Roy Morgan Weekly Consumer Confidence Index ticked higher from 109.7 to 109.8. NAB Business Confidence climbed from 0 to 3 in March, with March’s NAB Business Conditions gaining from 2 to 6.

The Australian Dollar to US Dollar (AUD/USD) exchange rate has fallen to a low today of 0.7559.

US Dollar (USD) Exchange Rate Strengthens on Safe-Haven Demand

The ongoing geopolitical tensions between Greece and Eurozone officials have caused trader risk-appetite to dampen significantly. With little known as to the full impact a Grexit would have on the currency market, there is a rising demand for safe-haven assets such as the US Dollar.

March’s US Advance Retail Sales data will dominate focus for those invested in the ‘Greenback’, with March’s figure forecast at 1.0%. Given that the Federal Reserve has stated that a benchmark rate increase would be subject to data results, rate hawks will be hoping that the actual result betters the median market forecast.

Australian Dollar to US Dollar (AUD/USD) Exchange Rate Forecast to Hold Losses

Although there are plenty of US data reports due for publication later during the European session, many of which have the potential to provoke volatility, dampened market sentiment is likely to see the Australian Dollar to US Dollar (AUD/USD) exchange rate hold losses for the remainder of the European session. With that being said, however, a particularly poor result from US retail sales data could see the US Dollar plummet across the board.

The Australian Dollar to US Dollar (AUD/USD) exchange rate climbed to a high of 0.7624.

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