Currency Update - Tuesday 19th March 2019
AUD
The AUD build on its recent strength yesterday, pushing to highs of 0.7120, before trimming some of those gains to open at 0.71 U.S cents this morning. Risk sentiment was again upbeat, stocks closing mostly in the black overnight, oil was 1% higher, the AUD supported by the recent strong performance in commodity prices. Gnerally speaking it was a quiet session however, with currencies trading in a tight range. Data was thin on the ground, that changes today with the release of the RBA's Meeting Minutes. The meeting took place before the weak Q4 GDP figures, so we are not expecting too much deviation from the RBA's last minutes. There is always the risk of a dovish tilt from the RBA considering the recent data run however. Resistance is at 0.7150, support at 0.7025.
USD
With no meaningful data from the U.S overnight the USD traded in a tight range, the USD index (DXY) is in a downlward trajectory at present, opening at 96.52. Wall Street opened to modest gains and closed marginally in the black. U.S bond yields closed lower again, reinforcing the bid in stocks of late. Eurodollar remains within the 1.13 -1.14 handle, the Pound softened against the USD as the House Speaker refused a third vote on May's Brexit Withdrawal. Data picks up tonight with the release of January's Durable Goods and Factory Orders.
EUR
The European Trade Balance numbers printed as expected overnight, the Euro sitting comfortably within it's recent range. With no other data to report, it really was a quiet evening for volatility, European bourses were a mixed bunch, the DAX under-performed, the CAC and others closing with modest gains. Italian Trade Balance and German ZEW Economic Sentiment Survey are released later this evening. The Euro is being favoured over the USD at present as U.S data has recently slipped below that of the EU in terms of expectations and actual results. If the Euro can break above 1.1450, then we could see a further run of Euro strength, which would send the AUD below resistance at 0.62.
GBP
The Pound was trading well until German politician Braun said that Italy may block any extension to Brexit. The Pound was immediately on the back foot, especially as May is purely courting the DUP's and Tory Brexiteers votes. The EU have already made it clear the deal will not be changing. Then came the news from the House Speaker that a third meaningful vote on the same brexit withdrawal deal would not be allowed. The Pound came under pressure against the majors, the AUD giving up 20 pips from yesterday's fresh low. Unemployment figures and Claimant Count numbers are released this evening.
NZD
AUD/NZD opens at 1.0365, within range. This morning's Kiwi Consumer Sentiment disappointed fell from 109 to 103, the Kiwi softened a little on the result. NZD/USD remains well bid in the face of USD weakness at 0.6850. No further data today, the NZD to react to risk sentiment and flows in and out of the USD.
Today’s data
AUD:
RBA Minutes
USD:
Durable Goods, Factory Orders
EUR:
March ZEW Survey