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- The Australian Dollar underperforms as market sentiment turns slightly cautious amid uncertainty over the US-Iran truce.
- Iran criticizes the US for violating the terms of the 10-point peace proposal.
- The RBA is expected to raise interest rates again in May.
The Australian Dollar (AUD) trades lower against its major currency peers, is down 0.2% to near 0.7030 vs. the US Dollar (USD) during the European trading session on Thursday. The antipodean faces selling pressure as market sentiment turns slightly risk-averse amid uncertainty surrounding the sustainability of the two-week ceasefire between the United States (US) and Iran announced on early Wednesday.
Australian Dollar Price Today
The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the weakest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.02% | 0.00% | 0.21% | 0.06% | 0.18% | -0.25% | -0.08% | |
| EUR | -0.02% | 0.00% | 0.20% | 0.07% | 0.16% | -0.24% | -0.09% | |
| GBP | -0.00% | -0.00% | 0.19% | 0.05% | 0.15% | -0.25% | -0.09% | |
| JPY | -0.21% | -0.20% | -0.19% | -0.14% | -0.03% | -0.46% | -0.28% | |
| CAD | -0.06% | -0.07% | -0.05% | 0.14% | 0.12% | -0.30% | -0.14% | |
| AUD | -0.18% | -0.16% | -0.15% | 0.03% | -0.12% | -0.39% | -0.23% | |
| NZD | 0.25% | 0.24% | 0.25% | 0.46% | 0.30% | 0.39% | 0.16% | |
| CHF | 0.08% | 0.09% | 0.09% | 0.28% | 0.14% | 0.23% | -0.16% |
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).
At press time, S&P 500 futures have posted some losses, trading 0.2% down to near 6,770. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, rises 0.1% to near 99.10.
The uncertainty over the US-Iran ceasefire has stemmed from continued attacks from the Israeli regime on Iran-backed Houthis in Lebanon. Iran’s parliament speaker and chief negotiator, Mohammad Bagher Qalibaf, criticizes the US for violating the first clause of the 10-point proposal, which states “an immediate ceasefire everywhere, including Lebanon and other regions, effective immediately”.
Meanwhile, both the US and Iran have announced that they are sending teams to Pakistan for the first round of talks regarding the 10-point peace proposal, which is scheduled to start on Saturday.
On the monetary policy front, traders see a 60% chance that the Reserve Bank of Australia (RBA) will raise its Official Cash Rate (OCR) again in the May policy meeting, according to a Reuters report. Hawkish RBA bets are majorly driven by high inflationary pressures in Australia, which were elevated even before the energy crisis-driven inflation globally.
In the US, investors await the US Consumer Price Index (CPI) data for March, which will be released on Friday.
Risk sentiment FAQs
In the world of financial jargon the two widely used terms “risk-on” and “risk off'' refer to the level of risk that investors are willing to stomach during the period referenced. In a “risk-on” market, investors are optimistic about the future and more willing to buy risky assets. In a “risk-off” market investors start to ‘play it safe’ because they are worried about the future, and therefore buy less risky assets that are more certain of bringing a return, even if it is relatively modest.
Typically, during periods of “risk-on”, stock markets will rise, most commodities – except Gold – will also gain in value, since they benefit from a positive growth outlook. The currencies of nations that are heavy commodity exporters strengthen because of increased demand, and Cryptocurrencies rise. In a “risk-off” market, Bonds go up – especially major government Bonds – Gold shines, and safe-haven currencies such as the Japanese Yen, Swiss Franc and US Dollar all benefit.
The Australian Dollar (AUD), the Canadian Dollar (CAD), the New Zealand Dollar (NZD) and minor FX like the Ruble (RUB) and the South African Rand (ZAR), all tend to rise in markets that are “risk-on”. This is because the economies of these currencies are heavily reliant on commodity exports for growth, and commodities tend to rise in price during risk-on periods. This is because investors foresee greater demand for raw materials in the future due to heightened economic activity.
The major currencies that tend to rise during periods of “risk-off” are the US Dollar (USD), the Japanese Yen (JPY) and the Swiss Franc (CHF). The US Dollar, because it is the world’s reserve currency, and because in times of crisis investors buy US government debt, which is seen as safe because the largest economy in the world is unlikely to default. The Yen, from increased demand for Japanese government bonds, because a high proportion are held by domestic investors who are unlikely to dump them – even in a crisis. The Swiss Franc, because strict Swiss banking laws offer investors enhanced capital protection.













