Aussie weakens mildly in Asian session and is heading to 0.7559 support against the greenback. Trade deficit widened for the third straight month to AUD -1.26b in February, slightly wider than expectation of AUD -1.25b. Exports dropped -4.6% yoy as iron ore export volume struggled on weak demand. But it should be noted the price of iron ore than tumbled to decade low since late March and thus, would continue to weigh on exports. imports rose 4.9% yoy driven by consumption and capital goods. The Aussie stays the weakest major currency this week on expectation of RBA rate cut. Markets are fully pricing in a 25bps cut to 2.00% by May, with 70% chance that it will happen in April meeting next week.
In US, stock were weighed down by disappointing ADP and ISM data overnight. But the DJIA and S&P 500 both stayed in recent range and the moves were seen as part of recent consolidation. Dollar is steady against other major currencies with mild weakness seen against Loonie and yen. Atlanta Fed Dennis Lockhart said that the factors contributing to the weakness in the first quarter are "transitory" and there will be a "pick-up" in the second quarter. He's maintained his view that Fed is on track for a rate hike in June to September period.
Elsewhere, Japan monetary base rose 35.2% yoy in March. UK PMI construction is the main focus in European session and is expected to rise slightly to 60.4 in March. US will release Challenger job cuts, trade balance, factory orders and jobless claims. Canada will release trade balance.