Currency Update- Monday 15th April 2019
AUD
The see saw price action for the AUD continued last week, the AUD closed out the week strong though trading to recent highs at 0.7192 as risk assets and commodities caught a bid. Investors were left waiting all day for the trade and lending data out of China, eventually hitting the wires as the offshore session begun, the positive China prints boosted the AUD and the climb versus the Big dollar begun. Chinese New Home Loans increased along with Aggregate Financing and the Trade Balance figures showed an increase to the surplus, printing at 221.23b (CNY), smashing the forecast of 76.60b. With risk assets finding favour both the Antipodeans were buoyed throughout offshore trade, AUD opening this morning in the upper end of the recent range although off the highs. Globally equity markets enjoyed the reversal in sentiment and one can expect the ASX to take the lead and open on a positive note today. The CRB added 0.6% with Oil increasing by 0.4%, the ‘Doctor’ also making solid gains of 1.9% to reflect the positive sentiment. Key prints this week come from Offshore, mainly US and China, locally the RBA minutes are released tomorrow but nothing new is expected, employment numbers to print on Thursday. AUD looks capable of pushing on from here if the 0.72 handle can be broken, support sits at 0.7120.
USD
Positive Chinese data boosted sentiment to close out the week and some of the USD safe haven buying was reversed. AUD/USD was a major mover with the Aussie pushing up to test the 0.72 handle, ultimately failing though at 0.7162 on this attempt. The big dollar was weaker across most pairs as sentiment reversed and the U.of Michigan. Sentiment Survey did little to aid, printing at 96.9 versus forecast of 98.2, a decline from the previous 98.4. The Import Price Index though printed flat at 0.2%, forecast was for 0% giving the greenback some respite. Wall Street did enjoy the positive sentiment with all three bourses closing in the black , setting the ASX up for a decent open. Industrial and Manufacturing Production the first key note from the states to print tomorrow, Net Long Term TIC flows kick of the data calendar later today. If sentiment holds AUD/USD could find further upside this week.
EUR
European equities also enjoyed the turn in sentiment to close out the week, all the major indices closed in positive territory. Industrial Production for the Zone printed a decline of 0.3% for February but was a beat on the forecast of -1% and boosted sentiment further before ECB’s Weidmann questioned the German Economy. Weidmann, a known hawk, said the German economy is still slow and likely behind forecasts with little to no recovery in the manufacturing sector. With Germany being the largest single economy in the EZ the ramifications are clear to all. Brexit continues to bother the Europeans and no resolution seems in sight, expect the volatility to continue based on headlines. No major data to come from the Zone to kick off the week, the German ZEW survey to come tomorrow, with all eyes on German data lately this print takes on new importance.
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GBP
Nothing of note data wise from the UK to close out last week, Brexit continues to be a major driver and a major bore ! The seemingly never ending back and forth in the UK looks set to continue for even longer with negotiations ongoing as to how long the extension will be. Cross party talks continue and it seems a compromise must be met on the customs union before a road forward can be found, for now though the impasse remains. Rightmove House Prices print this evening ahead of tomorrow’s labour market data dump from the UK.
NZD
Much like the AUD the Kiwi took gains on the USD to close out last week following the reversal of sentiment, NZD/USD managing highs of 0.6782 as the news from China hit the wires. Of the Antipodeans though, the AUD remains the out-performer, AUD/NZD currently sitting just shy of the 1.06 handle. Dairy Auction prices are doubtful to turn the Kiwi around and the week kicked things off with a declining Performance Services Index from across the Tasman, printing at 52.9 down from 53.6. CPI to come from NZ Wednesday morning.
Today’s data
AUD:
No Data
GBP:
Rightmove House Prices