Currency Update - Monday 16th September 2019
AUD
AUD is holding on to recent gains as demand for safe haven currencies dried up last week - even the weekend’s drone attacks on Saudi oil fields has had little effect as currency markets open this morning. Encouraging signs on the trade war front; Hu Xijin, the editor of the Global times is to add new US farm products to the tariff exemption list while also encouraging the purchase of certain farm products. Local data is steady this week, the highlights being tomorrow’s Monetary Policy Meeting Minutes & House Price Index, followed by Thursday’s employment data dump. Central banks are also in action this week with The Fed, Bank of England, Bank of Japan and Swiss National Bank all reappraising their interest rates. It will be interesting to see how the different countries approach the sub-par global economic growth environment.
USD
A reasonably quiet week of trade closed without fanfare and AUD opens at 0.6876, close to its recent highs against USD. Better than expected US Retail Sales figures (0.4% actual vs 0.2% expected) weren’t enough to knock AUD of its perch. Drone strikes over the weekend on Saudi oil fields are the talk of the morning, Oil is likely gap higher at open, however AUD remains little changed. The Fed is all but guaranteed to cut interest rates by 25 basis points on Wednesday night, the question will be whether they also signal further rate cuts or not. No data from The States tonight, resistance for AUD sits at 0.6920 and support forms at 0.6820.
EUR
AUD opening just above 0.62 this morning after surviving last week’s ECB meeting relatively unscathed. A slower week ahead on the European data front, tomorrow night’s German ZEW Economic Sentiment survey the most important piece, however focus is likely to be firmly on the various Central Bank meetings including The Fed on Wednesday night. No data this evening.
GBP
AUD opens just above the 0.55 handle, almost 2% lower than the high from last week. It should be an eventful week ahead here with Brexit developments and the Bank of England in the spotlight; the UK Supreme Court will decide on Boris’ prorogation of parliament and the BoE is expected to leave rates unchanged at 0.75% on Thursday evening. Throw in Wednesday’s UK CPI data and there’s plenty to shift AUDGBP this week.
NZD
The AUD pushed to 10-month highs against NZD late in trade on Friday, opening slightly lower at 1.0772 this morning. Kiwi GDP on Thursday morning will be the data highlight for the week, 0.4% growth for the second quarter is expected. It’s still too early for the effects of the RBNZ’s 50 basis point interest rate cut to flow through to the GDP figures, AUD in with a chance to push on here.