Aussie dollar is cushioned to its major downtrend on two important factors. Namely, first, RBA monetary policy and Caixin manufacturing PMIs.
The Reserve Bank of Australia’s monetary policy is scheduled for this week (on April 2ndprecise). Unusually, this meeting will be on the same day as the announcement of the Federal Budget at 7:30 pm that evening. As such, we would expect that the Governor’s Statement will be fairly low key with little change from the sentiment we saw in the March meeting.
Following the May meeting, the RBA will move to a clear easing bias as per Westpac’s projections, which would be justified by the downward revisions in the growth forecasts.
However, it is unlikely that there will be any hints of this action in the April Governor’s Statement.
Elsewhere, Caixin Chinese Manufacturing PMI numbers post an upbeat above the neutral 50.0 flashes at 50.8. Production and total new work both increase at quicker rates. Since China is Australia’s major trade partner, it is important to track their business sentiments.
Although the number consistent with only a marginal pace of improvement, the index reading was the highest seen since July 2018.
Manufacturing production in China rose for the second month in a row in March. Though modest, the rate of increase was the quickest seen since last August. The upturn was supported by a stronger, albeit still relatively muted, rise in total new work. Furthermore, new export orders rose slightly after a fall in February.
Trade tips: On hedging grounds, at spot reference: 0.7130 levels, contemplating above fundamental factors, we advocate initiating longs in AUDUSD futures contracts of Apr’19 delivery as further upside risks are foreseen and simultaneously, shorts in futures of May’19 delivery for the major downtrend. Thereby, one can directionally position in their FX exposures. The directional implementation of the same trading theme by further allow for a correlation-induced discount in the options trading also if you choose strikes appropriately. Courtesy: Westpac & IHS
Currency Strength Index: FxWirePro's hourly AUD spot index is inching towards 134 levels (which is highly bullish), while hourly USD spot index was at -15 (mildly bearish), while articulating (at 08:26 GMT). These indices are also conducive for the above hedging set-up.
For more details on the index, please refer below weblink: http://www.fxwirepro.com/currencyindex


Bank of Korea Holds Interest Rates Steady as Weak Won Limits Policy Flexibility
China's Refining Industry Faces Major Shakeup Amid Challenges
U.S. Treasury Yields Expected to Decline Amid Cooling Economic Pressures
Japan’s Finance Minister Signals Alignment With BOJ as Rate Hike Speculation Grows
Fed Officials Split as Powell Weighs December Interest Rate Cut
Goldman Predicts 50% Odds of 10% U.S. Tariff on Copper by Q1 Close
UBS Predicts Potential Fed Rate Cut Amid Strong US Economic Data
Indonesia Surprises Markets with Interest Rate Cut Amid Currency Pressure
Mexico's Undervalued Equity Market Offers Long-Term Investment Potential
Gold Prices Slide as Rate Cut Prospects Diminish; Copper Gains on China Stimulus Hopes
U.S. Banks Report Strong Q4 Profits Amid Investment Banking Surge
UBS Projects Mixed Market Outlook for 2025 Amid Trump Policy Uncertainty
Japan’s Inflation Edges Higher in October as BOJ Faces Growing Pressure to Hike Rates
BOJ Governor Ueda Highlights Uncertainty Over Future Interest Rate Hikes
US Gas Market Poised for Supercycle: Bernstein Analysts 



