Currency Update - Thursday 16th May 2019
AUD
The AUD just held onto the 0.69 mantle overnight, trading as low as 0.6915 before risk appetite recovered lifting the AUD to 0.6924 this morning. The AUD is hardly out of hot water with the release of local employment figures later this morning at 11:30am. As we know the RBA are almost entirely focused on the direction of employment when deciding whether to adjust monetary settings. 15.2k jobs are expected to be added today. The employment sub index printed in the Business Confidence figures earlier in the week printed a negative number for the first time in years, an ominous sign, but one which may not be reflected this early in today's data. Yesterday's Consumer Sentiment diappointed, with average wages dipping 0.1% under expectations also, inflation going nowhere! Chinese data was shockingly bad, which initially weighed on stock markets and risk sentiment. Stocks were tanking leading into the U.S session, where a more conciliatory tone by U.S/China leaders helped risk assets recover later in the session. Support is at 0.6905, resiatance at 0.70/0.7050.
USD
Weak U.S data had next to no impact on U.S equities or the USD. U.S Retail Sales for April fell -0.2% (0.2% exp), Industrial Production declined fell -0.5% (0.0% exp), Manufacturing data printed a modest gain. Trump was on the wires saying that he was 'considering' postponing automotive tariffs on the EU & Japan for up to 6 months, whilst Mnuchin said the U.S and China were still engaged in serious talks to improve trade, adding there was lots fo work to do. Fed Officials were again talking of patience, meanwhile stocks rallied from 0.7% losses to post modest gains. Building Permits, Housing Starts and Jobless Claims are released this evening.
EUR
European data again outperformed that in the U.S, French CPI printing 0.1% above expectations, Flash GDP q/q as expected at 0.4%. making way for Eurodollar gains back over 1.12. With the initial flight to safety overnight, treasuries rallied initially, European stock recovered early losses as risk markets began to recover after a speech from Chinese President Xi and a more conciliatory tone from Trump and Mnuchin. With no EU data set for release this evening the AUD will trade heavily at 11:30am if Employment data impresses or disappoints.
GBP
British P.M intends to run her Brexit bill through parliament... again... on 3rd June. She is imploring MP's to 'do their duty' and vote in its favour. The chances still remain slim that any Brexit Withdrawal deal proposed by May will be voted into law. The Pound fell to 1.2827 against the USD as a compromise between parties remains slim, AUD up to 0.5389 this morning. With no U.K data releases this evening all eyes are squarely on today's local employment data.
NZD
The Kiwi opens flat against the NZD and lower against the USD at 0.6555. No local Kiwi data today, so Kiwi again remains at the mercy of the USD.
Today’s data
AUD:
April Unemployment
USD:
Building Permits, Housing Starts, Weekly Jobless Claims, Philly Fed Survey
EUR:
Trade Balance
CNY:
New Home Prices, Manufacturing Sales