There was a time (most of the last two decades) when if we saw the S&P 500 fall 10%, the Australian dollar would be straight down with it. However the US tariff war has unleashed something different in markets and we’re seeing AUD holding up in the storm.
To be fair, AUD/USD is still near the bottom end of its five-year range but it hasn’t risen in the past two weeks in the US equity market rout. Today, it’s up another 40 pips and near a session high with US stocks nearly flat.
AUDUSD daily
That takes it just above the spike high from early March and to the best levels since February 23.
Taking a wider look, there are a nice series of higher lows on the daily chart since the start of the year (excluding the brief spike lower on tariff fears on Feb 3). That’s a good sign going forward and today’s China consumer stimulus announcement is a further reason for optimism.
