Currency Update - Tuesday 15th October 2019
AUD
The Australian Dollar and other risk assets were trading a little softer overnight following low volume trading as the US was out celebrating the Columbus Day holiday. The sentiment is down slightly than the previous day after reports came in regarding US-China trade negotiations that signaled a few remaining issues are yet to be solved. While substantive progress has been made China has advised that they “want more talks before signing Trump’s ‘Phase One’ deal”. Similarly, the talk of a large gap between EU & UK negotiations has also taken a little bit of the optimism out of the market. Australian Dollar has picked up this morning ahead of the RBA Meeting Minutes out at 10:30am this morning. Chinese
USD
The roar has turned into something of a cough after the Australian Dollar spent the latter half of the day giving up much of the ground it has gained the previous week reaching a low of 0.6751. USD strength was on the rise with optimism from US/China on the way down and the Aussie took a knock accordingly. We’re slightly higher off the back of the RBA Meeting Minutes set to come out later today. Key today to watch out for will be inflation data from China which is likely to show elevated CPI inflation and deepening PPI deflation. Dovish comments from the RBA and/or weak China data could certainly prove problematic for the Aussie bulls who’d like to see the AUD consolidate above 0.68.
EUR
The Australian Dollar has see-sawed against the Euro after taking a fall overnight. We’ve come up from overnight lows to trading at 0.6146 at time of writing. In Brexit news European negotiations have seemingly hit a roadblock with the current deal being proposed by the UK government being met with some skepticism in Brussels. A relatively quiet day in terms of data and news but a concern in Europe is the state of the German economy and we have the German ZEW Economic Statement out later today. This should provide further insight into whether Germany is destined for a recession or if there is hope on the horizon. If Europe’s economic struggles continue and global sentiment remains strong expect the Australian Dollar to start moving up.
GBP
The Australian Dollar appears to be in a holding pattern against Pound Sterling with markets trading at 0.5371 this morning. After a huge surge in GBP strength the Australian Dollar appears to have consolidated and now awaits Brexit news to determine where to head next. With the predictable complications between UK and EU negotiations there remains significant upside for the Australian Dollar in the event that no-deal Brexit swings back into play. Moving forward, there are still possible outcomes of an extension, no deal and a deal and the next couple of weeks will be pivotal.
NZD
The Australian Dollar is on the move up after spending much of yesterday posting losses to the Kiwi Dollar. Currently trading at 1.0752 the Kiwi’s woes seem set to continue without any data until tomorrow morning to assist them in trading.