Currency Update - Tuesday 12th March 2019
AUD
The Australian Dollar managed to catch a bid overnight on some return to risk and an improvement to the commodity sector. Black Gold was up 1.2% following a Saudi announcement that they would extend their oil cuts to April and the Doctor (copper) added 0.2%, a reflection of the slightly improved sentiment. Globally, share markets were mostly higher, with Tech stocks leading the way. The Sino/US talks are dragging on but there has been no bad news as yet so markets are hopeful this is a good sign. The UK PM May, met with the EU in an attempt to secure something new ahead of the vote tomorrow, giving the GBP a boost and assisting to improve sentiment further. Brexit will be a major news piece this week as a series of votes are set be decided in the UK Parliament, expect high volatility in the AUD/GBP cross. AUD seems to have battled on and has regained a somewhat bid tone, hitting highs of 0.7066 overnight and this is where we sit as I write. The NAB Business Confidence is the key local release today with many forecasting a decline in conditions and Home Loans up at the same time will be closely watched for more signs of a slowdown. Resistance likely at the 0.71 mark and support found at the 0.7050 level.
USD
US stocks had a reversal overnight and all three major indices closed firmly in the black, Tech stocks were the major winners with the Nasdaq closing a full 2% higher but both the DOW (+0.7) and the S&P (+1.3) showed gains. Retail Sales for the month of January were higher, rising 0.2% to beat the forecast of a flat read, Ex Autos and Ex Autos and Gas also way ahead of the expectations. The Greenback though, not getting a leg higher from the data as commodity currencies staged a mini rally and Sterling led the way higher against the big dollar on Brexit headlines. US Business Inventories were flat but the uptick in stocks was a positive move and set the ASX up for a decent open this morning. Powell to speak this morning at a Washington Conference ahead of US CPI and Average Earnings data from the States
EUR
The Euro traded sideways against the USD overnight, AUD/EUR opening a shade below 0.63 Euro cents. German Industrial Production fell by more than expected at -0.8% (0.5% exp), USD weakness helped to support the Euro. It was a rather lacklustre session, the Euro stuck in a tight range against the USD, european stocks closed in the black after a ripsnorter of a session for U.S equities. This eveing is again quiet on the data front, so expect the Euro to take it's lead from the USD and Pound.
GBP
The Pound put in a strong rally overnight, sending the AUD sub 0.54 and the USD down to 1.3150. Theresa May heads to Europe to try and win last minute concessions before tomorrow's withdrawal vote. Improving speculation around May's ability to win concessions made the Pound the best performing currency overnight, allowing other minor/major currencies to make positive ground up against the Greenback. Expect more volatility this week as crucial votes are made in the U.K parliament. It's a huge evening for U.K data, Trade Balance, Industrial Production and GDP should add to volatility to an already skittish Pound.
NZD
The Kiwi opens at 0.6831 against the USD after a weaker session for the big dollar. It's a quiet week for Kiwi data this week, any moves will be USD driven. Risk sentiment picked up overnight however, commodity currencies making ground against their peers. AUD remains heavy against the Kiwi at 1.0345. No local data of interest for the Kiwi this week.
Today’s data
AUD:
NAB Business Confidence, Jan Home Loans
USD:
Feb CPI
EUR:
ECOFIN meetings