Currency Update - Tuesday 25th June 2019
AUD
It has been a quiet 24 hours for currencies so a quick market update this morning. The AUD seeked out small gains against a generally weaker USD overnight, opening at 0.6963 this morning. Governor Lowe's speech yesterday had little impact on the local unit, which finds itself higher much like most of the majors against the big dollar. The G20 summit is in focus this weekend, the importance of these meetings is palpable in markets, as investors look to the future U.S/China trade relationship in particular. If a conciliatory tone arises then stocks as well as the AUD should rally. It is a very quiet week locally for economic data, there is a plethora of U.S data meanwhile, Friday's GDP the standout, the AUD will likely be most volatile therefore in overnight sessions this week. With the USD remaining offered the past week, the AUD could make its way back to 0.70 resistance, support now sits at 0.6920.
USD
The USD index opens at 96.00 this morning, well below resistance at 97.00 as the Fed prep markets for a rate cut sometime in the not too distant future. Stocks took a breather overnight, but remain at elevated levels, the outcome of the Trump/Xi meeting critical for markets this weekend. Eurodollar is up at 1.14, a decent run for the single currency as it takes full advantage of USD weakness. To the data and the Chicago Fed National Activity Index for May printed slightly behind target, the Dallas Fed National Activity Index printed worse than expected however (-12.1 v's 2.0). Trump announced further sanctions on Iran, which targeted the Supreme Leader and other high ranking officials. Oil price dipped a little on the announcement. Wall Street closed marginally in the red. Consumer Confidence, New Home Sales and June's Richmond Fed Manufacturing will be in focus this evening as the Fed looks to the data to help formulate future monetary policy adjustments.
EUR
German Business IFO printed as expected, Belgian IFO was significantly lower however. The Euro opens at 1.14 against the USD this morning, pushing the AUD/EUR cross down to test 0.61 once more. European equities took profit, with most bourses down between 0.1 & 0.5%. European data picks up again on Thursday with the release of German & Spanish CPI.
GBP
There's nothing much going on with the Pound this week, economic data is second-tier in nature. That didn't stop the Pound being favoured above the USD over the past few sessions however, GBP opening at 1.2735. Boris Johnson remains in the headlines and is still clear favourite to become the Conservative party's new PM. He reinforced his view overnight that he doesn't believe the U.K will leave Europe with a hard Brexit, but that he was willing to do so if the Europeans don't play ball. There's still plenty of uncertainty hanging over the Pound, with a possible general election in the running if Boris runs into problems with his own party members.
NZD
The Kiwi opens higher against the USD at 0.6620, a decent gain when compared to the AUD's slow grind higher. Kiwi Trade Balance is released later this morning. Apart from that the Kiwi is at the mercy of the USD until the RBNZ's important monetary policy decision on Wednesday.
Today’s data
AUD:
No Data
USD:
June Consumer Confidence, New Home Sales, Richmond Fed Manufacturing
NZD:
Trade balance