Australian Dollar outperforms as risk-on dominates amid US-Iran optimism

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The Australian Dollar (AUD) trades higher against its major currency peers, except the New Zealand Dollar (NZD), during the European trading session on Thursday.

The Australian Dollar gains against its major currency peers amid the risk-on mood.
The US-Iran negotiations will likely reach a breakthrough in the coming hours.
Investors await the US NFP data for April, which will be released on Friday.

The Australian Dollar (AUD) trades higher against its major currency peers, except the New Zealand Dollar (NZD), during the European trading session on Thursday. The antipodean is up 0.35% to near 0.7262 against the US Dollar (USD), as the market sentiment remains favorable for riskier assets due to optimism regarding the end of ongoing conflicts between the United States (US) and Iran.

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 Japanese Yen.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-0.18%	-0.21%	0.00%	-0.04%	-0.27%	-0.30%	-0.15%
EUR	0.18%		-0.03%	0.20%	0.15%	-0.08%	-0.12%	0.03%
GBP	0.21%	0.03%		0.21%	0.18%	-0.06%	-0.09%	0.05%
JPY	0.00%	-0.20%	-0.21%		-0.06%	-0.28%	-0.35%	-0.15%
CAD	0.04%	-0.15%	-0.18%	0.06%		-0.22%	-0.25%	-0.11%
AUD	0.27%	0.08%	0.06%	0.28%	0.22%		-0.04%	0.11%
NZD	0.30%	0.12%	0.09%	0.35%	0.25%	0.04%		0.15%
CHF	0.15%	-0.03%	-0.05%	0.15%	0.11%	-0.11%	-0.15%

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).

In European trade, S&P 500 futures post fresh all-time highs at 7,382. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades 0.12% lower to near 97.90.

The optimism towards the US and Iran reaching a peace deal has improved, following a post from Al-Hadath, sister channel to Al Arabiya, on X, that “intense communications are ongoing to gradually reopen the Strait of Hormuz”, a vital passage to almost 20% of global energy supply. The post also expressed confidence that there could be “a breakthrough for the situation of the ships stranded in the strait in coming hours”.

Going forward, the major trigger for the Aussie pair will be the US Nonfarm Payrolls (NFP) data for April, which will be published on Friday. Investors will pay close attention to the US NFP data to get fresh cues on the Federal Reserve’s (Fed) monetary policy outlook.

The US labor market report will likely show that the economy created 60K fresh jobs, significantly lower than 178K in March. The Unemployment Rate is seen as steady at 4.3%. Average Hourly Earnings are seen rising at a faster pace of 3.8% Year-on-Year (YoY) against the prior reading of 3.5%.

Economic Indicator

Nonfarm Payrolls

The Nonfarm Payrolls release presents the number of new jobs created in the US during the previous month in all non-agricultural businesses; it is released by the US Bureau of Labor Statistics (BLS). The monthly changes in payrolls can be extremely volatile. The number is also subject to strong reviews, which can also trigger volatility in the Forex board. Generally speaking, a high reading is seen as bullish for the US Dollar (USD), while a low reading is seen as bearish, although previous months' reviews and the Unemployment Rate are as relevant as the headline figure. The market's reaction, therefore, depends on how the market assesses all the data contained in the BLS report as a whole.

Why it matters to traders?

America’s monthly jobs report is considered the most important economic indicator for forex traders. Released on the first Friday following the reported month, the change in the number of positions is closely correlated with the overall performance of the economy and is monitored by policymakers. Full employment is one of the Federal Reserve’s mandates and it considers developments in the labor market when setting its policies, thus impacting currencies. Despite several leading indicators shaping estimates, Nonfarm Payrolls tend to surprise markets and trigger substantial volatility. Actual figures beating the consensus tend to be USD bullish.

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