Currency Update - Tuesday 16th July 2019

AUD

The AUD was supported by stronger commodity prices overnight and stronger than expected Chinese economic data yesterday. Despite the ongoing U.S/China trade war Chinese GDP printed as expected at 6.2% growth for the year. Retail Sales, Fixed Asset Production and Industrial Production all beating expectations. The Antipodean currencies both rallied despite a stronger USD overnight, AUD jumping ahead against the Pound and Euro also. With no local data to report the focus will be on today's release of the RBA's July Meeting Minutes. Sentiment remains in favor of the AUD for now, with the potential for gains up to 0.71 U.S cents. Markets are expecting a rate cut from the Fed later this month, which is helping the AUD buoyancy.

USD

U.S data was minimal overnight, Empire Manufacturing for July printed at 4.3 (2.0 exp), providing the catalyst for USD gains against the Pound and Euro. Technical trading saw the DXY higher, AUD and Kiwi hanging onto recent gains and more. Risk sentiment was subdued but generally positive, with small gains for U.S stocks, U.S treasuries closed lower along with most commodities. Meanwhile, news spread that Trump is considering removing Commerce Secretary Wilbur Ross, the little reaction in the markets, DXY opening a shade below 97.00 this morning. June Retail Sales and Industrial Production are released this evening.

EUR

There was little to report from the Eurozone overnight, AUD continues to take out gains against the single currency, which opens at 0.6250, a two month high today. European equities closed with gains of between 0.3% and 0.5%, the Euro lower against the USD and other majors. It's a quiet start to the week for the single currency, with the release of July's ZEW Survey later this evening. Markets are expecting the ECB to adjust monetary settings sooner rather than later, causing investors to flee the single currency.

GBP

The AUD is decent value up at 0.5622 against the Pound, the highest rate since mid-January. Traders are considering the possibility of a no-deal Brexit with Boris in charge and that is being reflected in the recent weakness in GBP. The FTSE closed 0.1% higher, May Unemployment numbers are released this evening.

NZD

The Kiwi closed higher against the USD overnight but tracked sideways against the AUD. Quarterly CPI printed as expected at 0.6% this morning, no real movement in the Kiwi to report. Movements will now be dictated by moves in and out of the big dollar.

Today’s data

AUD:

• July RBA Minutes

USD:

• June IP, Retail Sales

EUR:

• German ZEW Survey

GBP:

• May Unemployment

NZD:

• Q2 CPI