Currency Update - Monday 8th July 2019
AUD
The AUD opens sub 0.70 U.S cents this morning, a response to a stronger than expected U.S Non-Farm Payroll result. Investors bought USD's and pulled back from risky assets, global stocks closing the week lower. AUD/USD hit a high of 0.7047 last week, but failed to close above important resistance at 0.7050. The stronger than expected U.S payrolls number have investors paring back the chances of an early rate cut by the Fed, keeping the pressure firmly on the local unit. With thin markets conditions last week volumes should bounce back today as the U.S workforce return from their 4th July celebrations. It's a quiet-ish week for local data, NAB Business Confidence and Westpac's Consumer Confidence the pick of the data released Tuesday and Wednesday respectively. Support this week can be found at 0.6950 & 0.69, resistance is now at 0.70 & 0.7050.
USD
NFP's posted a gain of 224k in June, a decent beat of 160k expectations. The USD likes the positive news and rallied against the majors, the Pound sinking below 1.25, Euro at 1.1226 this morning. The AUD couldn't hold onto last weeks' gains, following the majors lower. U.S Hourly Earnings fell by 0.1% for both the month and year, Unemployment rose by 0.1%. The prospects of a July rate cut by the Fed have now diminished, perhaps signaling the start of a stronger USD in the weeks ahead. U.S yields shot higher, meanwhile equities were softer at the close. President Trump chose to attack the Fed once more, whilst congratulating himself on the strongest U.S economy of all time. Fed Chair Powell speaks mid-week, the FOMC's latest minutes are released Wednesday, CPI on Thursday, PPI Friday. Fed commentary comes thick and fast this week, so we'll be keeping an eye on any change of tone from members.
EUR
The Euro opens lower against the Greenback, which jumped above resistance at 97.0 in DXY terms in Friday's trade. It was a quiet close to the week for European data, stocks fell 0.5% reflecting the mood in equities around the globe. Greece's centre-right opposition party 'New Democracy' won the nation's snap general election, Alexis Tsipras admitting defeat. Turnout in the election was around 56%, one of the lowest in decades. Meanwhile Deutsche bank confirmed that they plan to axe around 18,000 jobs over a three year period. The ECB's Monetary Policy Meeting Accounts are released Thursday, otherwise it's a steady stream of EU data throughout the week this week, starting with tonight's EU Trade Balance, German Industrial Production and EU Sentix Investor Confidence figures.
GBP
The Pound opens significantly weaker against the USD this morning, after a strong U.S NFP's number Friday evening. Investors are finally waking up to the growing chances of a Hard-Brexit or at least a General Election. Political uncertainty remains high and with economic data weighing heavy of late the Pound looks to be vulnerable to further losses. AUD/GBP is sitting pretty up at 0.5571, close to last weeks highs' of 0.56. GDP & Manufacturing Production data released Wednesday is the pick of the data this week. Investors will be watching for any deterioration in the data as an excuse to sell the Pound.
NZD
The Kiwi has found support at 0.6625 against the big dollar after reaching highs of 0.67 last week. It's a quiet week for Kiwi data, but a big week for Kiwi cricket, as the black caps play India in the semi-finals tomorrow evening. The Kiwi remains at the mercy of USD strength and with a return to trading over 97.0 in DXY terms, there is scope there for further gains this week should U.S data improve.
Today’s data
AUD:
June's Job Ads
USD:
Consumer Credit
EUR:
German Industrial Production, Trade Balance, EU Sentix Investor Confidence