Australian Dollar outperforms on broader risk rally, hawkish RBA bets

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The Australian Dollar (AUD) outperforms its major currency peers, trading 0.16% higher to near 0.7175 ahead of the opening of United States (US) markets during the European trading session on Friday.

AUD/USD rises to near 0.7175 as the Australian Dollar outperforms amid the risk-on mood.
Market sentiment remains favorable for riskier assets on Iran truce hopes.
Traders expected the RBA to hike interest rates further by 55 bps this year.

The Australian Dollar (AUD) outperforms its major currency peers, trading 0.16% higher to near 0.7175 ahead of the opening of United States (US) markets during the European trading session on Friday. The Aussie pair trades firmly as Iran optimism-based broader risk rally has strengthened the antipodean.

Australian Dollar Price Today

The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the strongest against the New Zealand Dollar.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-0.15%	-0.02%	0.00%	-0.18%	-0.14%	0.09%	-0.18%
EUR	0.15%		0.12%	0.11%	-0.05%	0.00%	0.22%	-0.03%
GBP	0.02%	-0.12%		-0.02%	-0.18%	-0.13%	0.10%	-0.15%
JPY	0.00%	-0.11%	0.02%		-0.15%	-0.12%	0.10%	-0.14%
CAD	0.18%	0.05%	0.18%	0.15%		0.04%	0.25%	0.03%
AUD	0.14%	-0.00%	0.13%	0.12%	-0.04%		0.22%	-0.02%
NZD	-0.09%	-0.22%	-0.10%	-0.10%	-0.25%	-0.22%		-0.24%
CHF	0.18%	0.03%	0.15%	0.14%	-0.03%	0.02%	0.24%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).

During the press time, S&P 500 futures trades 0.2% higher to near 7,060, reflecting a strong demand for riskier assets. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades marginally lower to near 98.10. The DXY is all set to close negatively for the second straight week.

A broader risk rally suggests that market participants are confident of the announcement of a permanent ceasefire between the United States (US) and Iran, as President Donald Trump has expressed multiple times that Washington is close to reaching a deal with Tehran.

US President Trump said in a press briefing on Thursday, “We're very close to a deal with Iran,” while warning that military actions against Tehran would resume if a deal is not closed. Trump also said that Iran is willing to give up its enriched uranium and surrender its nuclear ambitions.

On the domestic front, market participants expect the Reserve Bank of Australia (RBA) to deliver more interest rate hikes this year. In the March policy meeting, the RBA raised its Official Cash Rate (OCR) by 25 basis points (bps) to 4.1%, and warned that inflation was already high in Australia before the war in the Middle East started.

According to a Reuters report, the RBA is expected to raise its OCR further by 55 bps in the remaining year to 4.65%.

Economic Indicator

RBA Interest Rate Decision

The Reserve Bank of Australia (RBA) announces its interest rate decision at the end of its eight scheduled meetings per year. If the RBA is hawkish about the inflationary outlook of the economy and raises interest rates it is usually bullish for the Australian Dollar (AUD). Likewise, if the RBA has a dovish view on the Australian economy and keeps interest rates unchanged, or cuts them, it is seen as bearish for AUD.