Currency Update - Wednesday 23rd October 2019
AUD
A rather subdued 24 hours on currency markets has passed, and with Japan enjoying a day off (Emperor’s Coronation), at least the Asian session today will remain quiet allowing AUD to consolidate recent gains. The Canadian Prime Minister Trudeau won re-election yesterday, AUDCAD unmoved by the result. The RBA’s Chris Kent speaks today in what is the only event on the local economic calendar, it’s unlikely to move AUD around.
USD
AUD opens this morning at 0.6852 after peaking at 0.6883 overnight, just shy of the September highs. There was only low-impact data from the US last night, with Existing Homes Sales missing the mark (5.38m actual vs 5.45m expected) however the Richmond Manufacturing Index improved from last month’s sub-par result. The mixed data from the States continues to support the prospects of a Fed rate cut next week, markets currently pricing a 90% chance of rates being by a further 25 basis points to 1.75% which would be the third cut in a row. Resistance for AUD sits just shy of 0.69 and support circa 0.6820.
EUR
AUD traded just a 17 pip range against EUR in the last 24, opening this morning at 0.6158. The UK’s Brexit plans had a mixed night (see below for details) allowing the current holding pattern. The EU’s Juncker added his two cents, describing Brexit as a waste of time and energy. Only low-impact EU Consumer Confidence numbers from the Zone tonight, however the economic data ramps up tomorrow night with the ECB in action.
GBP
AUD opens slightly higher this morning at 0.5323 as Brexit grinds towards a conclusion. Overnight The UK Parliament voted to pass the Withdrawal Agreement to the next stage of the parliamentary process 329 to 299, however it then failed a vote on the three day timetable by a very slim margin (322 to 308) which all but confirms the 31 Oct deadline will not be achieved. There are murmurs that Boris will accept a short 10 day extension from the EU to allow a longer timetable for the Withdrawal Agreement, an extension which may be enough to swing the 7 votes needed to pass the vote on the second count. GBP has held most of its recent gains which could indicate markets are confident a deal is still imminent. No data from the UK tonight.
NZD
A quiet last 24 here too, AUD happy to trade narrowly either side of the 1.07 level. Kiwi Trade Balance this morning showed a deficit of $1242m which was slightly better than expectations however unable to move the currencies. That’s it for NZ data for the week, current ranges likely to persist.