Currency Update - Friday 16th August 2019

AUD

Currency markets have been relatively subdued over the last 24 hours with little for traders to sink their teeth into. The dramatic fall of global equities yesterday stabilized to some degree overnight as the initial fear of global recession abated, local stocks today unlikely to repeat the circa 3% losses already inflicted. Yesterday’s Employment data was slightly better than expectations, with 41k new jobs created (14k expected) and the Unemployment Rate remaining steady at 5.2% as expected. No local data due as we head into the weekend, AUD trading tight ranges across the board.

USD

AUD opening at a familiar 0.6775 this morning having traded a very tight 21 pip range overnight. The main data pieces from the US were strong, comfortably beating expectations; Retail Sales (1.0% actual vs 0.4% expected) and Philly Fed Manufacturing Index (16.8 actual vs 10.1 expected). Nothing from The Trump overnight however a comment from China that they hope the US will meet them halfway in negotiations was largely ignored by markets. Only mid-tier data due for release tonight in the form of Building Permits and Prelim UoM Consumer Sentiment.

EUR

With France and Italy sharing a holiday yesterday, markets were quiet, AUD opening this morning at 0.6097. ECB’s Rehn said that there is a need for a “significant and impactful” easing package in September and suggested it could include rate cuts and substantial bond purchases. He added that a weakening economy justified the position and said that it was better to overshoot on stimulus than undershoot. It would seem that the prospects of a German recession is worrying policy-makers. A lazy AUD only slightly able to capitalise and this is unlikely to change to great effect before next week with no data from The Zone due for release tonight.

GBP

AUD opens at 0.5602 against GBP this morning, tight ranges again. UK Retail Sales rose 0.2% m/m in July, beating forecasts for a 0.2% decline, seeing y/y growth down from 3.6% in June to 2.9% in July, though again better than 2.3% forecasts. No Brexit news with the UK Parliament still on break. Not data due tonight either.

NZD

AUD is hanging on to the 1.05 handle in a very lethargic session against NZD. With the data flows all dried up, perhaps the Bledisloe Cup decider this weekend can add some spark to this friendly rivalry.


Today’s data

AUD:

  • No data

USD:

  • Building Permits

  • Prelim Uom Consumer Sentiment

EUR:

  • No data

GBP:

  • No data

NZD:

  • No Data

CNY:

  • No data

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