Currency Update - Friday 12th July 2019

AUD

Home Loan data printed flat (-0.6% exp), Inflation Expectations were 0.1% lower.  The AUD was little effected, trading in a tight 30 pip range the past 24 hours.  The USD struggled, losing ground to the majors as commodities softened, trade fears again on trader's minds. Investors cautiously bought stocks with global bourses generally stronger at the close.  It should be a quiet end to the week with recent currency ranges being respected.  It's a quiet day in Asia, with just the release of Chinese Trade Balance figures for June.  The AUD ran out of steam yesterday at 0.6988, support is now at 0.6950 with 0.7000 topside resistance, 0.7050 after that.   

USD

U.S CPI data matched expectations, 0.1% for the month and 1.6% y/y. Core CPI rose 0.1% to 0.3% m/m and was up a similar amount over the year rallying to 2.1%.  Will this and continued strong payrolls be enough to stop the Fed from cutting rates later in the month.  Powell's testimony would suggest that the Fed will likely cut for insurance purposes, but this data does muddy the water somewhat.  The Fed's Barkin was on the wires saying there was little reason to cut rates at present, Williams talked about the mixed outlook, Bostic was sceptical of a July rate cut.  If the Fed do hold off the AUD is likely to test support at 0.69 U.S cents.  Wall Street closed in the black, the Dow up 0.85%.  Producer Price Index is released this evening, it should be a quiet close to the week. 

EUR

German and French CPI printed as expected overnight, AUD/EUR up a smidge today, just shy of 0.62 Euro cents. Stocks closed in the black despite trade concerns and lower commodities.  EU industrial Production for May is released this evening, again it should be a quiet end to the week in terms of volatility.  

GBP

The British Navy intervened in the Strait of Hormuz yesterday, allowing safe passage of a BP tanker as three Iranian Navy vessels tried to block it's massage.  Heightened tensions remain, all sides being on high alert.  The only data of note was the BOE's Financial Stability Report, which again highlighted the risks a no-deal Brexit would pose for the economy.    The BOE's Vlieghe speaks this evening, ranges remain intact although the Pound does look susceptible to further losses. 

NZD

AUD/NZD remains flat, NZD/USD up to 0.6663, a result of a weaker USD overnight.  Manufacturing PMI is released later this morning.  The flightless bird is again at the mercy of USD movements over the weekend.  


Today’s data

USD:

  • PPI

EUR:

  • Industrial Production

GBP:

  • BOE Speak

NZD:

  • Manufacturing PMI

CNY:

Trade Balance

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