Currency Update - Monday 8th April 2019
AUD
The AUD closed out the week quietly the data front, AUD/USD having consolidated ahead of the much awaited NFP, after first losing and then regaining the 0.71 handle we ended the local session at highs, around 0.7130. Offshore though was another story and mixed US data whipped the Aussie around, albeit in a now familiar, and tight, range. The ASX closed down for the week but may take a leg higher on open today, if the rest of the world’s markets are anything to go on; equities around the world had a solid close with the FTSE the surprising highlight for European stocks. A slow start on the local data front this week, the major piece to come on Wednesday, Deputy RBA Governor Debelle to speak on ‘The State of the Economy’. Following on from the from the RBA’s change of tone at their last meeting, this will be the first key communication, as such Debelle’s comments will be keenly dissected. A host of prints to come from China this week and news from the Sino/US negotiations are likely to dominate AUD direction. AUD/USD remains in the familiar range of 0.7050 as support and 0.7150 as resistance.
USD
US data was mixed to close out the week, the headline Non-Farm Payroll print was a convincing beat, adding 196k in new jobs versus the forecasted 180k. After the shocking weak number in Jan though most were expecting something of a recovery for Feb. The official Unemployment rate remained flat at 3.8% and Earnings data failed to inspire with Average Hourly Earnings at 3.2% versus 3.4% forecast and Average Weekly Hours also flat at 34.5. The Greenback was marginally weaker following the prints with both the AUD and NZD gaining but the recovery was swift as the session unfolded. AUD falling to sub 0.71 levels and the Kiwi at lows of 0.6720. Wall Street was solid, all three bourses closed in the black, Black Gold continues to be well bid, adding another 1.9% but the Dollar is flat in DXY terms at 97.38. Retail Sales and the ISM prints to come tonight, Trump has called for the FED to bring back QE so as usual Trump headlines and Tweets will provide additional volatility.
EUR
German Industrial Production m/m rose by 0.1% in what was the only piece of EU data this weekend. The Euro traded in a narrow range, settling in the middle against both the USD and AUD. AUD opens at a familiar 0.6334, the USD around 1.12 cents. European equities pushed marginally higher, in what was another positive close to the week for risk. This weeks sees the ECB in action, we'll hear from the central bank Wednesday evening. No change to rates expected, Draghi is likely to wax dovish which could add strength to the local unit. Before that we get Sentix Investor Confidence and German Trade Balance this evening, Italian Retail Sales will be of interest tomorrow along with Industrial Production figures for France and Italy on Wednesday. German and French CPI will peak investors interest, released on Thursday.
GBP
The Pound opens softer this morning as the Brexit impasse continues. According to newsreels Theresa May requested an extension to 30th June 2019, whilst Labour's Deputy Leader Watson continued to push for a second referendum. May is still holding out for a Brexit agreement by 23rd May, but with parliamentarians unable to find a majority for any Brexit agreement plan, the prospects look think in such a time short timeframe, unless concessions can be made. Labour Leader Corbyn again denounced the P.M for her parties lack of concessions at cross-party talks. The FTSE was one of the best performers over the weekend, gaining 0.6%. AUD/GBP climbed to 0.5450, the Pound meanwhile gave up ground against the USD, opening at 1.3035 this morning. Monthly GDP and Manufacturing Production numbers, released Wednesday are the pick of the data points this week. Meanwhile, Brexit messiness is set to conitnue.
NZD
AUD/NZD opens well bid at 1.0550, the AUD steaming ahead in recent weeks after a more dovish RBNZ opened the door on rate cuts this year. The Kiwi hasn't totally fallen out of bed, but opens significantly lower against the USD at 0.6731 this morning. The USD Index (DXY) is closing in on it's range highs, a break up over 98.00 would see further declines for the Kiwi. WIth no data of note being released until Thursday, the Kiwi will take it's cues from risk flows and USD flows.
Today’s data
AUD:
March Job Ads
USD:
Durable Goods Orders, Factory Orders
EUR:
German Trade Balance, EU Sentix Investor Confidence