Australia

RBA cash rate futures currently imply a 62% chance of an RBA cut in May, and those odds are likely to increase further should trimmed mean inflation dip to 3% y/y or lower.

Trade optimism send the US dollar higher for a second day, and sending demand for the Japanese yen and Swiss franc lower. This bodes well for my bullish outlook for USD/JPY and USD/CHF.

The solid rebound for the Australian dollar over the past two weeks is showing signs of losing steam, with AUD/USD forming a bearish outside day on Tuesday thanks to comments from US Treasury Secretary Scott Bessent boosting the US dollar.

Federal Reserve Chair Jerome Powell will speak on the U.S. economic outlook before the Economic Club of Chicago on Wednesday. And if we maintains his "wait and see" approach Fed members are generally aligned with regarding tariffs, it could help the US dollar extend its bounce seen on Tuesday.

The Australian dollar posted a strong recovery, after coming precariously close to testing the 59c last week. And that has left an apparent v-bottom on the AUD/USD chart, a pattern usually associated with significant lows.

President Trump made an unexpected reversal on Wednesday by temporarily lowering tariffs on many of the countries he had just imposed them on. Risk surged, seeing the Nasdaq achieve its fourth best day in history and AUD/USD marked its best day in 15 years.

The Australian dollar has dipped its toe into the 50-60c range - a level historically reserved for times of great economic stress. But with traders pricing in a global recession now Trump's tariffs have been announced, AUD/USD could be set for a sustained move within that grizzly range.

The Australian and Canadian dollar came under further pressure on the eve of Trump's liberation day, seeing AUD/USD fall as much as -1.3% and USD/CAD rise 0.7%. And the relative underperformance of the two could bode well for AUD/CAD bears, which is displaying several clues on the higher timeframes that it could be headed lower.

AUD/USD is on track for a bullish month for March, even if it handed back over half of its early-month gains. Attention now shifts to tomorrow's RBA meeting for AUD/USD traders, alongside ISM and NFP reports from the US.

AUD/USD has made a mild attempt to move higher this week, yet higher timeframes continue to suggest a move towards 62c. And that could see GBP/AUD have a crack at the 2020 highs over the near term, though I'm also keeping an eye out for a cycle top and pullback.

The anticipated bounce on the US dollar index is finally underway, Wall Street indices enjoyed their best day in just over a week and the Japanese yen was broadly lower as the week kicked off with a risk-on tone.