Currency Update - Thursday 11th July 2019
AUD
The AUD fell to 0.6911 before USD weakness allowed the AUD to rally 0.6% to this morning's open at 0.6964. Westpac Consumer Sentiment was a weak print yesterday, falling to -4.1% (-0.6% prev). Chinese CPI printed as expected, Producer Price inflation falling from 0.6% to 0.0% (0.3% exp). The big news overnight came from Fed Chair Powell, who waxed dovish on the economic outlook with rate cuts the likely scenario in the not too distant future. Stock markets rallied, global futures pricing finding a bid amongst most bourses. Commodities and gold also caught a bid, aiding the AUD's ascent. Local May Home Loans data is released later this morning, with many pundits applauding 0.1% gains and calling an end to the house price rot, this number will take on more significance over the coming months. Support is at 0.6950 & 0.69, resistance at 0.70.
USD
The FOMC Minutes from the June meeting confirmed that many Fed members saw a case for lower interest rate settings, no doubt providing a conducive environment for positive stock movement. This, accompanied by Powell's dovish speech saw stocks and commodities rally, the USD falling across the board. Powell suggested that inflation could remain stubbornly weak for an extended period of time and that housing and manufacturing are also likely weaker in Q2. It remains to be seen whether the Fed will act as quickly as this month or whether they will hold off until later in the year. Weekly Jobless Claims and CPI data are released this morning.
EUR
The ECB cut growth forecasts by 0.1% for both GDP and inflation overnight. The Euro came out relatively unscathed, stock futures rallying after the close as it is likely the ECB will have to move to a more accommodative stance on monetary policy sooner rather than later. June CPI for Germany and France is released this evening. AUD/EUR remains a shade under 0.62 cents this morning, with local home loan data released at 11:30am.
GBP
U.K May GDP came in as expected at 0.3%, Industrial & Manufacturing Production figures both printed lower. May's Trade Deficit printed better than expected, the wash up didn't amount to much with the Pound unfazed. With no data to report this evening, the Pound will react to movements in and out of the USD.
NZD
The Kiwi opens flat against the AUD, but higher against the USD, which fell overnight in response to Powell's testimony, markets now expecting near-term rate cuts from the Federal Reserve. NZD/USD rallied 1% overnight, up to 0.6655. No data to report today from N.Z.
Today’s data
AUD:
May Home Loans
USD:
June CPI, Weekly Jobless Claims
EUR:
German/French CPI