Currency Update - Tuesday 11th September 2019
AUD
The Aussie Dollar has bumping into some troublesome resistance in the absence of any new data or events to help continue the push up. Trading has become extremely flat with a 21 point range for yesterday’s session and little has changed as we open this morning. This week has some big data releases out end of the week so expect another flat day of trading as traders prepare for those releases. We do possibly have Chinese New Loans coming out today however the release data is at China’s discretion so it could be as late as the 15th. Outside of this we’ve got USD Crude Oil Inventories out at 12:30am as first major data point this week to kick off what should be a turbulent finish to an otherwise uneventful week.
USD
The recent weakness in the USD continues unabated with the greenback chalking up another day of losses to most major pairs. The losses were minimal but noteworthy as US yields rose sharply with 2 and 10 year yields climbing 9 basis points. We can see the weakness is broadly associated with improved risk sentiment as we saw gold break down through some key technical levels. This confirms that at least short term sentiment remains optimistic. US JOLTS job opening falling in July for the second straight month didn’t help the situation either. With major data points end of the week don’t expect too much dramatic change today in the current risk on sentiment which should keep USD upside to the minimum until then.
EUR
Another fairly quiet day for the Euro as we eagerly await the European Central Bank’s policy decision and US CPI. Euro pushed slightly higher on the USD but remained fairly flat as traders hold position until the data releases start being published. We did see the Euro push off the lows amid talk that the ECB could delay the launch of QE if data allows. This coupled with news that China is expected to agree to buy more American agricultural products in hopes of securing a better deal has provided another nice boost to risk assets.
GBP
The UK has posted some solid data with the release of the ILO unemployment where it beat expectations with a print of 3.8% vs an expectation of 3.9%. The positive data which showed that UK basic wage growth has accelerated to its fastest pace since June 2008, an 11 year high. With wage growth ahead of the Bank of England’s target, this does raise some interesting upside risk of a rate hike when taken in isolation. This is another case of the actual hard economic data outperforming pessimistic forward looking surveys.
NZD
Little news for the NZD with the Antipodeans trading absolutely flat this week. The Kiwi Dollar doesn’t have much momentum at the moment fresh off some rough Chinese PPI data but the China-US trade war could soon be coming to a resolution which offers significant upside for the Kiwi. Look ahead for US CPI this week for some movement one way or another.