Currency Update- Friday 5th April 2019

AUD

There was little in the way of data for the AUD to react to in our local session, after peaking at 0.7125 mid way through the day the Aussie begun to drift lower, local stocks under performed too and closed down to the tune of 0.8%. Overnight the big dollar continued to consolidate ahead of the Non-Farm Payrolls data this evening and further positive rhetoric coming from the Sino/US trade talks. Positivity on the negotiations also provided support for the AUD and AUD/USD remained within a very tight range, AUD did briefly dip below the 0.71 handle but had recovered by the session close. We open this morning having regained the 0.71 at 0.7110 and with another day ahead devoid of any significant local data to consider. With the NFP and Wage data to come from the States tonight, offshore will provide direction for our Aussie battler. After a weak NFP print in February a rebound for the month of March may give the USD a catalyst to break higher. A close below the recent low of 0.7050 or above the recent top 0.7150 will set the tone for AUD in the short term.
 

USD

Positive comments from the Donald in relation to the ongoing Sino/US trade talks overnight gave the greenback some legs, in typical Trump fashion though the President clarified by saying any deal struck would need to be “a great deal” in order for the President to put pen to paper. In other Trump news the President continues to create a crisis at the border, after days of threatening to close the US/Mexico border, the Donald has seemingly capitulated. Comments from the President last night, “I don’t think we’ll ever have to close the border” with suggestion now the preferred penalty will be in the form of Trump’s much loved Tariffs, specifically Auto Tariffs. Data wise the Jobless Claims numbers were positive; Initial Claims fell to 202k from the previous 212k and beat expectation by 13k, Continuing Claims also declined by 38k, printing at 1717k to beat expectation of 1752k. Ahead tonight the NFP is the headline print, expectation is for 180k of new jobs to be added, following a weak February print there is scope for an over performance and we may see USD strength. Average Earnings data also to come this evening.
 

EUR

Angela Merkel and the Irish PM Varadkar were on the wires overnight calling for patience on Brexit, telling their peers to allow the UK Parliament time to outline a path forward and both stressing they wish to avoid a hard Brexit. That said it seems the UK Parliament could squander years and still get nowhere on the agreement as a stale mate continues to stymie progress. German Factory Orders were the major print from the Zone and once again disappointed, falling by 8.4% vs forecast of a 3.1% decline, Construction PMI though did increase modestly to hit 55.6, up from the previous 54.7, the EUR mildly softer on the release. More German data to print this evening in the form of Industrial Production. EZ equities were mixed at the close   
 

GBP

The Brexit standoff continues in the UK, the latest event, the cross party talks with Conservative and Labour, much to the repugnance of some brexiteers. Cross party talks went for almost 5 hours and there is suggestion this is more than a political stunt with both sides apparently keen to come to a compromise. The hope is that ahead of the weekend there will be some clarity as to whether the cross party process will be able to deliver a solution. There was no data of note from the UK, Brexit does and will continue, to dictate the direction of sterling, the FTSE closed marginally lower and tonight we have the Unit Labour Costs to print.  
 

NZD

The AUD managed to hit 8 week highs against the kiwi overnight at 1.0540, the NZD still reeling from a weaker RBNZ forecast and a bias to a looser policy. When priced against the Big Dollar the Kiwi also fell lower, breaking below the 0.6750 area to lows of 0.6745  before finding support following upbeat comments relating the Sino/US negotiations. No data from across the Tasman to close out the week.



Today’s data

AUD:

  • AiG Performance of Construction Index 45.6

USD:

  • Non-farm Payrolls, Unemployment Rate, Average Earnings 

EUR:

  • German Industrial Production

GBP:

  • Unit Labour Cost

FX Corp