Currency Update - Wednesday 10th July 2019
AUD
Weaker than expected business confidence figures released yesterday and continued USD strength has weighed on the AUD the past 24 hours. AUD/USD fell 0.6%, more so than other majors against the big dollar. Metals and commodities were weaker, seeing the AUD down as low as 0.6919 at one point. Consumer Confidence is released later this morning, Chinese CPI is also out. Tonight's speech by Fed Chair Powell will be important for direction, markets now unsure as to whether he will indicate if a near-term rate cut is required, or if last week's payroll numbers and marginally higher inflation numbers are enough to hold off from adjusting monetary settings. 0.6915 forms support, 0.6860 thereafter. Resistance now at 0.6950 & 0.70.
USD
It was a quiet evening for U.S data, the USD pushing ahead with gains made earlier in the week, taking the DXY to 97.56. The Pound and Euro were both weaker, furthering the USD's gains. Equity markets were weaker to start but made a comeback late in the session. President Trump had nothing to say on Twitter worth reporting, White House Economic Advisor Kudlow showing his support for the Fed's independence, a move that could anger Trump. Traders and Investors will keenly attune their ears to Powell's speech this evening. Markets are less sure that the Fed will cut rates later this month after more positive data released earlier in the month. It's going to be huge for markets, that have already priced in 3/4 rate cuts by the Fed this year.
EUR
Eurodollar clings to 1.12, Italian Retail Sales down to -0.7% (0.2% exp) and with the USD stronger. The ECB's new Chief Economist Lane seemed to prep markets for further central bank stimulus, saying the ECB were ready to act with risk remaining to the downside. European equities closed in the red, investors a little jittery about Powell's speech later this evening. There's no data released of note this evening.
GBP
The Pound remains offered, although was reprieved by a weaker USD overnight. AUD/GBP remains around the mid-0.55's, AUD weaker across the board and unable to take advantage of further Sterling weakness. Labour is now set to challenge the new tory leader (Boris most likely) to hold a second referendum, the Pound not enjoying the news, this outcome however is less likely than a host of other variables. U.K GDP for May is released later this evening and will be important for AUD/GBP.
NZD
NZD/USD opens at 0.66 U.S cents as the USD continues its streak of form this week. With no local data to report yesterday or today, the Kiwi will continue to react to moves in the USD for the most part.
Today’s data
AUD:
Consumer Confidence
USD:
Powell testifies
GBP:
Trade Balance, Industrial Production, May GDP
CNY:
CPI