Aussie Recovering From Earlier Drop

AUDUSD dipped to 0.6640 earlier in the session, the lowest since before the RBA surprise hike this week, but it is now back at around 0.6692, 0.3% above the NY close. The USD index has continued moving down and is 0.3% lower following -0.7% yesterday.

• Aussie has recovered some ground against its crosses after dropping on the back of the sharp risk reversal earlier in APAC trading and is now up slightly on the day. AUDJPY is +0.1% to around 89.99 while AUDNZD is 1.0714. AUDEUR is +0.1% to 0.6038 and AUDGBP +0.1% to 0.5316.
• The Australian March trade balance widened to $15.27bn on the back of stronger commodity exports, particularly iron ore. See Trade Surplus Widens Further On Stronger Commodity Exports.
• Equity markets are mixed with the ASX down 0.2% but the Hang Seng up 1.1%. S&P e-minis are up slightly. Oil has climbed back to its NY close and WTI is trading around $68.63/bbl. Copper is up 1.5% and iron ore is around $104/t.
• Later the ECB meets and is expected to hike rates 25bp. In the US, there are Q1 unit labour costs, March trade and April Challenger job cuts data. On Friday, the RBA publishes its Statement on Monetary Policy which includes the full set of forecasts.