Currency Update - Tuesday 16th April 2019
AUD
The Australian Dollar gave up some of the ground gained against the Greenback overnight but remained within a very tight range in what was a quiet start to the week. Commodities dropped after ending last week on a high, the CRB gave up 0.5% to close at 187.40 with Oil shedding a half percent and the doctor falling back to negative 0.1%. AUD/USD was range bound, moving within 20 pips with the AUD treading water ahead of key releases later in the week. Up today we have the Minutes from the RBA’s latest meeting, the RBA have sighted their concerns on growth (low GDP) but the labour market remains strong, we expect the RBA minutes to offer more of the same. Employment numbers up on Thursday will likely be of more interest to investors as the strength in our local labour market is key to staving off an interest rate cut. Strong support has now formed at the 0.71 level with resistance just below the 0.72 handle, after a couple of failed attempts at breaking higher. The Aussie battler continues the fight!
USD
A quiet start to the week on the data calendar had markets trading within tight ranges, equities around the world were mixed, the three major US bourses all closed lower to the tune of 0.1%. In DXY terms the greenback is very slightly higher, 0.02% to sit at 96.94 but the week kicked off very slowly indeed. Data wise there was little of note from our American cousins, we have Industrial and Manufacturing Production to come this evening. The FED’s Evans (centrist) was on the wires, sighting his concerns on weaker inflation and predicting the FED would remain on hold until mid-way through 2020, Evan's even went so far as to say there would be conditions where he would support a cut but clarified that is not yet the case. Little reaction from the big dollar to his comments though, it seems the market was already thinking the same! Sino/US talks are said to be going well and an announcement could be just around the corner, positive news here will further support the AUD.
EUR
Eurodollar remains trapped in a range at 1.13 this morning, AUD opens flat at 0.6343. It has been a quiet 24 hours for many markets, European equities closed marginally in the red as risk appetite was subdued. Both sides are talking up the prospects of a China/U.S deal, which would most certainly lift risk assets. Trump continues to threaten Europe with tariffs in what could be the next phase of his belligerent foreign policy. For now it's all quiet, second-tier German data released this evening.
GBP
The change in the asking price of U.K homes gained 1.1% last month, up from estimates of 0.4%. Brexit headlines were few and far between to start the week, Theresa May enjoying a holiday in Wales. Average Earnings and Unemployment data released tomorrow will be important for the Pound, although any chance of a BOE rate hike has seemingly evaporated due to the short 6 month extension to Article 50. The BOE are unlikely to rock the boat before any Brexit decision has been made. The Pound remains at 0.5474 against the AUD and around 1.30 versus the big dollar.
NZD
AUD/NZD rises to 1.06 again this morning. Pressure is likely to remain on the NZD as rates are expected to fall this year, whilst the RBA are on wait and see mode. NZD/USD opens at a familiar 0.6767. Local CPI released Wednesday will be an important release for our Antipodean cousin.
Today’s data
AUD:
RBA Minutes
USD:
March IP
EUR:
German ZEW Survey
GBP:
Average Weekly Earnings & Unemployment