Currency Update - Tuesday 9th April 2019
AUD
USD weakness has given the AUD a ride back up above 0.71 once again but the recent range has held firm and AUD/USD topped out at 0.7131. We had no local data to start the week and another quiet day to come, with only the Home Loans numbers of note at 1130. Off shore will continue to direct the AUD until tomorrow’s speech from Deputy RBA Governor Debelle, the latter half of this week though is packed with important Chinese numbers and further local prints of note, as well as a raft of US and UK data prints. Equities were sold off overnight so the ASX is likely to suffer on open today, interestingly the UK FTSE was one of the few markets to close in the black across Europe despite the ongoing Brexit mess. The Aussie battler has lived up to the name of late and the tight range remains, support has come from the Commodities markets (the CRB up 0.5%) with a massive rally in oil (42% for 2019 thus far). Sentiment will continue to add volatility, Brexit and the Sino/US negotiations remain at the forefront of traders’ minds. Support remains at 0.7050 and resistance at 0.7140/50.
USD
The greenback was weaker overnight, all three US markets were sold off but closed at or near to flat, the USD was 0.33% lower in DXY terms at 97.06. US Factory Orders printed at -0.5% to match the forecast and Durable Goods Orders were also on their forecast at -1.6%. The prints came with a host of other minor releases, all of which were flat or negative, adding weight to an already heavy big dollar. The US President is apparently on another purge, sacking the director of the US Secret Service overnight following the resignation of Homeland Security Secretary Nielson. Further infighting for the Trump administration may advance damage to the USD in the days ahead. Trump has recently removed his nomination for acting Immigration and Customs Enforcement Chief Ron Vitiello, suggesting the Donald’s tough stance on immigration is going to come to the forefront once again. No major data from the U.S of A this evening but a host of data to be released in the second half of this week.
EUR
AUD/EUR remains stuck at 0.5450, whilst the Euro took advantage of some USD weakness overnight, the buck unable to break through a big old range that has been in place now for close to a year's trade. To the data and German Trade Balance beat expectations, growth in imports and exports fell however. EU Sentix Investor Survey printed better than expected (0.3 v's -1.7), the data weas largely ignored however. European equities closed marginally in the red, gains only for for MIB. The ECB's rate decision and statement on Thursday is key for the single currency this week.
GBP
AUD/GBP traded sideways despite the EU's chief negotiator Barnier expressing confidence in an extension being granted to the U.K, with a possibility of adjustments to the future relationship. The Pound made modest gains against a weaker USD. U.K P.M May heads to France and Germany to plead European leaders to extend Brexit, she also intends to formally write to Labour Leader with her Brexit proposals. Corbyn however is surcuspect of May being able to change her red lines. GDP and Manufacturing Production are released tomorrow evening, Brexit developments to dictate GBP direction overthe coming week.
NZD
The Kiwi is pulling itself off the mat, opening marginally higher as the USD allows some breathing space. AUD/NZD opens flat. With no data to report the Kiwi will react to risk flows and movements in and out of the big dollar.
Today’s data
AUD:
February Home Loans
USD:
Jolts Job Openings