Currency Update - Tuesday 11th June 2019

AUD

The AUD is trading lower this morning at 0.6960 after peaking at 0.7025 yesterday.  This happened despite risk sentiment overall being positive and a more positive outlook for the U.S/Mexico trade relationship.  China's trade balance figures yesterday were positive, tomorrow's local Business Confidence will be important tomorrow, Wednesday sees a speech from RBA Assistant Governor Kent, as well as Consumer Confidence numbers and Chinese CPI and PPI.  Local Employment numbers released on Thursday will be the key release for the AUD this week, as we know the RBA are looking very closely at this data and will for the most part dictate how quickly rates are likely to fall this year.  The ASX is back to it's best at 6500, global stocks also rallied. Suport for the AUD can now be found at 0.6940, resistance at 0.7025. 

USD

Trade worries concerning Mexico and the U.S are cooling, as it looks like both sides are ready to make a deal.  Investors enjoyed the positive news sending stocks higher, the S&P closed +0.5%, Nasdaq +1%.  Data was thin on the ground, markets focused on Trump's comments that something had to be done about China deliberately devaluing their currency.  In a rather light trading session risk was sold off as headlines spread that a plane had crashed into a building in Manhattan.  News that a helicopter had crashed sent traders in bull mode, U.S bonds selling off somewhat.  The China/U.S relationship will dictate headlines this week, especailly with the G20 meeting approaching.  PPI and CPI are released over the coming days, both important releases from the U.S. 

EUR

Italian Industrial Production numbers fell by 0.7% (0.2% exp), Eurodollar remains above 1.13 however after Draghi was less dovish than expected last week.  AUD/EUR opens lower this week at 0.6151, after reclaiming the 0.62 handle over the past few weeks.  European stocks rallied along with global stocks.  All in all a quieter start to the week.  June Sentix Index is relased this evening, a second-tier report.  Draghi's on the wires tomorrow evening, German CPI is released Thursday, along with European Industrial Production. French CPI is released Friday.  

GBP

The U.K released a series of weak data overnight starting with GDP, which fell by 0.4% (-0.1 exp), the biggest monthly fall in over 3 years.  Industrial Production and Manufacturing Production fell well behind target also.  The weakness in this core data was explained away by the original Brexit cliff edge as companies stockpiled for a potential crash out of Europe.  Meanwhile the BOE's Saunders said the central bank would need to raise rates faster than expected and that rates could move in either direction in a no-deal type scenario.  Average Earnings and Unemployment data are released today, the BOE Governor Carney is speaking Friday evening.  

NZD

AUD/NZD remains within a tight range, NZD/USD moves back down to 0.66 U.S cents.  Data has been thin on the ground, the Kiwi treading water and lacking any meaningful direction.  Data this week is second-tier in nature, the Kiwi will take it's cues from the USD and any developments in trade relationships between the U.S/China and Mexico. 

Today’s data

AUD:

  • Business Confidence

USD:

  • PPI

EUR:

  • June Sentix Survey

GBP:

April Unemployment 

FX Corp