Currency Update - Thursday 13th June 2019
AUD
The AUD opens under pressure this morning as traders pre-position themselves for today's Unemployment data, released at 11:30am. Investors are also concerned about the G20 meetings and whether any lasting deals will be negotiated to avoid further trade war sanctions between the U.S and a host of countries. Westpac's Consumer Sentiment data printed way behind target yesterday also, adding to the AUD's offered tone (-0.6% v's 0.6%). The question on everyone's mind is whether today's employment stats will provide enough fuel for the RBA to cut rates again in July, or whether the markets view of an August cut will be most accurate. The USD was stronger overnight despite marginally weaker CPI data, bringing the DXY closer to resistance at 97.00. Oil price was slammed, commodities in general not supportive of the Antipodeans. Support is found at 0.69, resistance at 0.70 U.S cents.
USD
U.S CPI printed as expected for the month at 0.1%, but fell by 0.1% for the yearly reading (1.8% v's 1.9%). The core measures were also 0.1% weaker than expected for both the month and year. That sent the USD briefly lower, before it recovered to post 0.3% gains on the USD index (DXY). Equity markets closed with small losses, oil price was hammered again by 4%, taking the recent losses to around 24%. Trump was partly to blame for equity losses as he again doubled down on China, saying that if no deal was reached extra tariffs of $325bn would be activated. He also announced that he was considering sanctioning Russia over it's Nort Stream 2 gas pipeline. This passive aggressive approached worked for Trump with Mexico, will his Twitter inspired approach work on the other superpowers? Time will tell, it does look like China is digging in for a long protracted battle however. Data out of the U.S this evening is second-tier in nature with the release of Weekly Jobless Claims.
EUR
Eurodollar dipped to 1.1293 as the USD closed marginaly stronger, AUD/EUR again on the ropes opening lower at 0.6136. Today's Unemployment numbers are critical for the local units direction, will unemployment have risen? If so, the AUD will almost certainly trade lower. Spanish CPI printed as expected at 0.2% in May, European equities closed with small losses of around 0.5%. The EU's April Industrial Production numbers are released later this evening.
GBP
The U.K parliament rejected a motion that would have seized control of the parliametary agenda in order to safeguard against a no-deal type exit from Europe. The Pound hardly reacted against the USD, which was independently bid, AUD lost around 0.5% to open at 0.5457 this morning. Boris Johnson remains the bookies favourites to win the Tory leadership battle. He announced that it is not his ambition to push the U.K over a cliff edge with Europe, but that instead he seeks negotiation with EU bigwigs over the existing withdrawal deal. Good luck with that one Boris. No data from the U.K this evening.
NZD
The Kiwi opens marginally higher against the AUD and at 0.6567 against the USD. The Kiwi lost significant ground earlier in the week and is still struggling to find its legs. With no local data released today, the Kiwi should react to movement in the majors and trade war developments.
Today’s data
AUD:
May Unemployment
USD:
Weekly Jobless Claims
EUR:
April IP