Currency Update - Friday 19th July 2019
AUD
AUD/USD opens at a three month high this morning as U.S Fed members waxed lyrical about impending rate cuts. The AUD punched above 0.7050 despite iron ore and oil prices falling out of bed. Risk assets liked the news from the Fed with global stocks closing in the black. The Fed are in action before the end of the month, it's now down to expectations as to the number of cuts as opposed to 'will they' cut. With the RBA seemingly 'done for now', AUD could travel higher from here, having broken through resistance. Yesterday's local employment data disappointed, the Aussie economy adding 500 jobs, as opposed to the 9,000 expected. The NAB Business Confidence figures were more impressive than expected however at 6 v's 11 previous. It's a quiet day for data around the globe, trouble in Iran keeps a geo-political conflict bid some commodity markets, as the U.S shot down an Iranian drone overnight. Governor Lowe speaks next week, we also get the release of the latest flash PMI's, otherwise it's a quietish week for local data. Resistance is now found at 0.71, support at 0.7050.
USD
The USD tracked lower overnight as investors take on board Fed comments which strongly suggest the Fed will cut rates in a few weeks' time by either 0.25% or 0.50%. 0.25% is the most likely outcome, a pre-emptive strike by the U.S central bank to extend this latest business cycle as U.S data whilst marginally improved, is still some of the worst around the globe. The Pound and Euro rallied along with the Antipodean currencies overnight, DXY falling to 96.68, under support at 97.0. Jobless Claims printed close to expectations, the Philly Fed Business Survey for July rose to 21.8 well above expectations of 5.0. Wall Street closed marginally higher despite escalations in Iran as the U.S shot down a U.S drone. The Uni of Michigan Survey is released this evening, the current theme of lower Fed rates should continue to reverberate around markets this weekend.
EUR
ECB staff explained that the central bank were considering a revamp of how they measure inflation, the fallout likely being further monetary easing and a weaker Euro. Eurodollar was lower overnight, but it did hold onto support at 1.12. AUD/EUR enjoyed the news up at 0.6267 this morning. Meanwhile a slight change of tone from the new European Commission President who said that she would do whatever it takes to achieve an orderly Brexit. There's no further European data tis evening, the Euro could remain on the back foot, especially in light of comments overnight.
GBP
AUD/GBP remains around the 0.56 mark, AUD bid across the board recently. The U.K Parliament voted to prevent a suspension over Brexit overnight, which makes a no-deal Brexit more difficult for old Boris, who will officially take the reigns as P.M next week. U.K Retail Sales printed well above expectations at 1% (-0.3% exp), Brexit concerns however are swamping the Pound at present, with analysts and investors re-calibrating their expectations of a hard Brexit. There's no data to report this evening so likely a quiet end to the week.
NZD
The Kiwi took advantage of USD weakness again overnight, peaking just below 0.68. AUD/NZD opens at 1.0420, no change there. Comments from Fed members overnight caused investors to sell USD's as an imminent rate cut looks likely, so there could be more blue skies for the Kiwi in the months ahead.
Today’s data
AUD:
No Data
USD:
Uni of Mig Sentiment