Currency Update - Tuesday 30th July 2019

AUD

AUD traded tight ranges to start the week in what could be the calm before the storm – a very busy week ahead kicks off today with the first of three Central bank meetings with Japan (the BoJ is expected to leave rates on hold). Local data also breaks cover in the form of Building Approvals for June although markets reaction could be delayed until tomorrow’s all-important inflation figures and Chinese manufacturing data. US/China trade talks resume later this morning and markets will be anticipating any excerpts offered to the public – can the forward progress built at G20 earlier this month be built upon?

USD

AUD is just holding on to the 0.69 handle this morning having lost 2.6% over the last 11 days. With no data of importance and a lackluster session on Wall Street overnight, President Trump came to the rescue taking to Twitter to take further shots at the Fed including that a “small cut is not enough” at this week’s FOMC meeting. No market reaction to his tweet (not his first tweet demanding action from the Fed), with focus instead on the Brexit developments under new UK PM Johnson (see below for details). The US data kicks off tonight with Consumer Confidence numbers and will continue to come thick and fast for the rest of the week. Support remains at 0.6880.

EUR

AUD lost ground over night against EUR, trading below 0.62 this morning at fresh two-week lows. Spanish CPI came in at -0.6% for July and 0.5% annually (makes Australian CPI look good) which was largely as expected and European equities closed with modest losses. German Prelim CPI for June released this evening, with the same measure for The Zone as a whole due tomorrow night.

GBP

GBP took a beating overnight, after UK Prime Minister Boris Johnson increased fears of a no deal Brexit, reiterating that the UK will leave the EU with our without a deal on October 31. This sparked the Pound to fall 1.4% against USD to lows not seen in over 2 years, while the FTSE gained almost 2% as the market positions for a potential exit at the October 31 deadline. AUDGBP was also able to capitalise, opening at 0.5647 this morning, up over 1% for 1-week highs. A quiet economic calendar from the UK tonight as we get closer to the BoE meeting on Thursday evening.

NZD

AUDNZD continues a closely fought battle, having traded in a 60 pip range for almost a week now. Tomorrow may add some fuel to the fire when Kiwi Business Confidence numbers are released within half an hour of the Aussie CPI data. NZD buyers desperately hoping AUD will persevere lest the AUDNZD March lows of 1.0277 draw closer.

Today’s data

AUD:

  • Building Approvals (11.30am)

USD:

  • Core PCE Price Index m/m

  • Personal Spending m/m

  • CB Consumer Confidence

EUR:

  • German Prelim CPI m/m

GBP:

  • No data

NZD:

  • No Data

CNY:

  • No data

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