Currency Update - Friday 21st June 2019
AUD
The AUD rallied as risk sentiment picked up again overnight, global stocks all closing in the green as the promise of lower rates and stimulus positively affected market sentiment. AUD sits close to the overnight highs this morning as investors respond to the Fed, ECB and Japanese central banks promising of more accommodative monetary policy. With no local data to report yesterday, the fireworks were left for stocks, the ASX opening at 6683 this morning, off the futures high of 6707 overnight. U.S data was mixed, next weekend sees the G20 summit, the Trump/Xi meeting will be critical for market confidence and will dictate whether this stock rally can continue. Tensions with Iran and the U.S heightened overnight as Iran shot down a U.S drone, which they claim to have crossed into their airspace. Resistance is at 0.6950, support at 0.6850.
USD
The June Philly Fed survey printed at +0.3% overnight, below expectations of 16.6, the Leading Index was also lower. Stocks rallied on the back of the dovish Fed, the S&P closing 1% higher. Trump said that Iran made a 'very big mistake' by shooting down a U.S drone and responded to a reporters questions as to whether the U.S would take military action, saying 'you'll soon find out'. An ominous comment, Trump has previously said that he does not want a war with Iran, when provoked however he could be far less forgiving. The escalation trimmed stock gains, the USD opening lower against the majors and Antipodeans this morning.
EUR
June's weaker consumer confidence numbers didn't stop the Euro from rallying against the USD, Eurodollar marginally under 1.13 this morning. AUD/EUR remains at a familiar level at 0.6129. This weekend sees the release of June Flash PMIs. European stock markets all closed higher.
GBP
Boris Johnson and Jeremy Hunt will face off in the final leadership vote, Boris being the favourite to win. Retail Sales fell by -0.3% (-0.4% exp). The BOE board unanimously left interest rates on hold overnight, but noted the downside risks to the outlook, lowering their Q2 growth forecasts to flat from +0.2%. The Pound was marginally higher against a weaker USD. AUD opens at a familiar 0.5448. With no U.K data released this evening, all focus will be on next week's G20 meeting and the implications this will have for global trade.
NZD
The Kiwi is marginally higher against the AUD this morning, NZD/USD a shade under 0.66. With no data released for Kiwiland, the NZD will react to any development in the trade war standoff at next weekend's G20 meeting.
Today’s data
USD:
June PMIs, Home Sales
EUR:
June Flash PMIs