Antipodean Currencies Rise, Yen Slides Amid US-China Trade Optimism

(RTTNews) - The antipodean currencies such as the Australian and New Zealand dollars strengthened against their major currencies in the Asian session on Monday, amid optimism about a potential U.S.-China trade deal after U.S. Treasury Secretary Scott Bessent confirmed that a trade deal has been struck with China following the weekend talks in Switzerland, with no more details offered. Meanwhile, the safe-haven Japanese yen weakened against its major counterparts in the Asian trading on optimism over a US-China trade deal.

There are reports the U.S. is hoping to slash China tariffs to below 60 percent from the current level of at least 145 percent. However, U.S. President Donald Trump said in a post on Truth Social that a higher "80% Tariff on China seems right," partly offsetting the positive sentiment.

Trump had earlier said many trade deals are "in the hopper," traders remain cautious even after announcement of the framework of a U.S.-U.K. trade deal.

Investors may also cheer easing geopolitical tensions following a ceasefire deal between India and Pakistan and ahead of "direct talks" to be held between Russia and Ukraine on May 15 in Turkey.

U.S. President Donald Trump's tour of the Middle East this week also remains on investors' radar. On the first major foreign trip of his second presidency, Trump will visit Saudi Arabia and then Qatar and the UAE.

Crude oil prices moved sharply higher, extending gains in the previous session amid optimism about a potential U.S.-China trade deal. West Texas Intermediate crude for June delivery crude for June delivery jumped $1.11 or 1.9 percent to $61.02 a barrel.

In the Asian trading today, the Australian dollar rose to nearly a 1-1/2-month high of 93.99 against the yen, from Friday's closing value of 93.21. The aussie may test resistance around the 96.00 region.

Against the euro and the Canadian dollar, the aussie advanced to 5-day highs of 1.7466 and 0.8961 from last week's closing quotes of 1.7542 and 0.8937, respectively. If the aussie extends its uptrend, it is likely to find resistance around 1.71 against the euro and 0.91 against the loonie.

Against the U.S. and the New Zealand dollars, the aussie edged up to 0.6433 and 1.0852 from Friday's closing quotes of 0.6412 and 1.0833, respectively. On the upside, 0.65 against the greenback and 1.10 against the kiwi are seen as the next resistance levels for the aussie.

The NZ dollar rose to nearly a 1-1/2-month high of 86.71 against the yen, from Friday's closing value of 85.89. The kiwi is likely to find resistance around the 88.00 region.

Against the euro and the U.S. dollar, the kiwi advanced to a 5-day high of 1.8930 and a 4-day high of 0.5935 from last week's closing quotes of 1.9037 and 0.5909, respectively. If the kiwi extends its uptrend, it is likely to find resistance around 1.86 against the euro and 0.61 against the greenback.

In economic news, data from the Ministry of Finance showed that Japan saw a current account surplus of 3.678 trillion yen in March, up 6.7 percent on year. That was in line with expectations and down from 4.061 trillion yen in February.

Exports were up 1.8 percent on year to 9.559 trillion yen, while imports were up an annual 1.3 percent at 9.042 trillion yen for a trade surplus of 516.5 billion yen. The capital account saw a shortfall of 68.6 billion yen, while the financial account had a surplus of 4.069 trillion yen.

Data from the Bank of Japan showed that the value of overall bank lending in Japan slowed for the second straight month, rising just 2.4 percent on year to 636.545 trillion yen. That's down from 2.8 percent in March and 3.0 percent in February.

The yen fell to nearly a 2-week low of 164.21 against the euro, nearly a 1-1/2-month low of 194.21 against the pound and more than a 1-month low of 146.28 against the U.S. dollar, from last week's closing quotes of 163.50, 193.41 and 145.36, respectively. If the yen extends its downtrend, it is likely to find support around 166.00 against the euro, 196.00 against the pound and 150.00 against the greenback.

Against the Swiss franc, the yen edged down to 175.21 from Friday's closing value of 174.83. The yen is likely to find support around the 178.00 region.

Looking ahead, U.S. WASDE report and U.S. monthly budget statement for April are slated for release in the New York session.