Currency Update - Wednesday 29th May 2019
AUD
The AUD opens at yesterday's levels, marginally above 0.69 U.S cents. Risk assets were sold overnight, global stocks closing lower, the AUD showed some resilience holding it's ground. With no data to report, action in the local unit has been muted the past 24 hours, the same fate awaits the AUD today as the data calendar is bare. Iron Ore remains well bid, after a stellar rally over the previous few weeks, commodities in general sitting at supportive levels for the AUD. Building Approvals and Capex data are released locally tomorrow, so we'll get an initial insight into the early GDP components for Q2. Markets will be focused on any developments in the U.S/China trade spat, with limited U.S data overnight making for a quietish 24 hours.
USD
Risk sentiment soured overnight, with U.S equities falling close to 1%, U.S yields were also lower, the USD was marginally stronger, the DXY closing up 0.25%. Housing data in Q1 was up 1.1%, the Case Shiller House Prices for March rose 0.09%, (0.46% exp). U.S Consumer Confidence rose to 134.1 (129.2 exp). The Pound and Euro both weakened against the USD, the local unit maintaining its strength. The volatility index moved higher, currenies generally remained within recent ranges, the JPY was stronger on account of a flight to safety. Second-tier U.S data is released this evening.
EUR
European data was again positive, keeping Eurodollar above recent lows. French Consumer Confidence came in at 99 (97 exp), EZ Economic Confidence rose to 105.1 (104 exp), whilst EU Consumer Confidence matched expectations. Data in Europe has printed above forecasts of late, U.S data most definitely the under-performer, a contributing factor in the USD index not being able to break and sustain a move higher. AUD/EUR reclaims the 0.62 handle despite the positive European data, with local CAPEX data released tomorrow important for ST direction. French CPI is released this evening.
GBP
The fallout from the European elections is making it difficult for the U.K to plot a route out of the EU. There is a growing likelihood of a no-deal Brexit as both remain and leave sides grow more polarised. AUD/GBP continues to creep higher as disillusionment and uncertainty reign in U.K political circles. The FTSE closed lower overnight on account of these fears and a general risk aversion tone to markets overnight. With no data to report the focus remains on Brexit developments.
NZD
The Kiwi remains slugglish against it's peers, AUD/NZD remaining in a tight range, NZD/USD still trading sub 0.66. RBNZ Governor Orr is speaking in the next few minutes, Business Confidence figures are released at 11am this morning, so likely to see some volatility in the NZD later today.
Today’s data
USD:
Richmond Fed Manufacturing
EUR:
May CPI - France