Currency Update - Wednesday 31st July 2019

AUD

The AUD’s woes continue this morning, hitting fresh 6 week lows farther below 0.69 after a renewed twitter attack on China by Trump. The twitter tirade went on the offensive warning China that any stalling tactics by Beijing to push back trade deal negotiations to after the 2020 election in the hope of a Democrat victory would be a futile exercise. AUD fell to 0.6882 against the greenback off the back of the tirade as investors sought to increase sell pressure on the beleaguered AUD in light of worsening global sentiment. Looking ahead it’s a big day of data with CNY official July PMI and AUD Q2 CPI data out at 11:30. If there’s lower lows or some form of recovery for the AUD these two data points will play important parts in the AUD’s immediate future.

USD

The USD has opened generally stronger this morning moving higher off the back of some positive data in the form of June Pending Home Sales rising by 2.8%  month to month while July Consumer Confidence printed at 135.7, above expectations. It wasn’t all smooth sailing however as Trump’s twitter antics put the US Fed in the cross hairs where he attacked what he perceived as the Fed moving “far too early and far too severely” on rates. Trump then pushed for a large rate cut and an end to quantities tightening at the FOMC meeting. The USD has further big data out this evening with Q2 employment cost index at and soon after 11pm Powell takes to the stage with a FOMC rate decision and press conference.

EUR

EUR meanwhile has quietly crept stronger this morning off the back of German CPI for July beating expectation coming in at 0.5% (0.3%) amid ongoing concerns over the frailty of their economy. On Brexit the EU line is being maintained that a withdrawal agreement cannot be reopened and their patience with the British parliament is well and truly used up.

GBP

Despite Boris Johnson’s unrelenting rhetoric on a no deal continues there has been some stabilization of Pound sterling against recent lows. Despite the small reprieve from the recent hammering, the Pound has suffered against major pairs, there is a little end in sight with some fears that the collapse is just beginning.

NZD

NZD has been fairly quiet in an otherwise bearish market. It continued its run south against the greenback off the back of Trump’s twitter onslaught on China but otherwise, there isn’t much movement in what will be a big week of data. ANZ Business Confidence comes out at 11am but otherwise, the Kiwi will be looking at the slew of AUD, CHY and USD data out this week.