Currency Update - Friday 28th June 2019

AUD

The AUD finds itself marginally higher this morning, reaching highs of 0.7008 overnight.  Risk Sentiment was subdued before this weekend's G20 meeting where Trump and Xi will meet to discuss the trade war.  Tempers seem to have cooled somewhat, markets are expecting no further escalation, but with no breakthrough either.  If the U.S pledges to hold off on future tariffs in the hope of reconciliation, markets could see this as a green light to re-instigate risk appetite. China however wants a level playing field and to be recognised as an equal partner, the U.S wants enforcement mechanisms.  Data was thin on the ground yesterday, U.S data is in focus this evening.  Gold and Oil were broadly lower overnight.  Private Sector Credit numbers are released locally today.  Resistance is at 0.7020, support at 0.6950.  

USD

Weaker than expected U.S data overnight didn't have any material effect on USD strength, the DXY opening a shade higher at 96.21.  U.S Q1 GDP printed at 3.1% (3.2% exp), Personal Consumption fell by 0.4%, Core PCE was revised higher interestingly to 1.2% (1.0% exp), Pending Home Sales crept 0.1% higher.  The Fed's Daly said it was too early to tell if monetary policy should be more accommodative.  A less dovish Fed next month could take markets by surprise and light a fire under risk assets that have priced in three rate cuts from the Fed this year.  Wall Street closed with small gains, USD bond yields fell by a small margin.  The Antipodeans bucked the trend both closing higher against the big dollar.  This evening sees the release of PCE Core Deflator, Personal Income and Spending data, as well as the University of Michigan Sentiment Survey.  The G20 Summit naturally has markets in it's embrace now, we could see some fireworks over the weekend if talks breakdown, or if we see an unexpected detente between the U.S and China.  

EUR

Spain's Flash CPI printed at 0.4% (0.8% exp), Germany's Prelim CPI result was 0.1% higher than expected.  AUD opens higher against the Euro this morning, Eurodollar softening a touch at 1.1367, as concerns grow about sentiment in Europe and the fact that the ECB seem to want to act more quickly to stimulate markets when compared to their American counterparts.  Equities were mixed, this evening sees the release of June CPI, an important data point for the ECB.  

GBP

The Pound opens lower against the big dollar and local unit this morning at 0.5528.  With no data to report the Pound was stuck in a tight range, this weekend's G20 the main event.  U.K Q1 GDP is released this evening, markets are expecting growth of 0.5%.  The Current Account numbers and GFK Consumer Confidence are also released. 

NZD

The Kiwi retains it's position after a decent rally against the AUD this week, opening at 1.0454.  The Kiwi pushed up to 0.67 U.S cents, highs not seen since 18th April, this despite the RBNZ indicating that rates may well need to be cut later this year. June's Consumer Confidence numbers are released this morning. 

Today’s data

AUD:

  • Private Sector Credit

USD:

  • May PCE Core Deflator, Personal Income & Spending, Uni of Michigan Sentiment

EUR:

  • June CPI

GBP:

  • Q1 GDP

NZD:

June Consumer Confidence 

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