Currencies Quiet Ahead of Thanksgiving Holiday
AUD
The AUD was trading within tight ranges amongst most of its peers, bar the Kiwi which announced an unsurprising rate hike on Wednesday of 0.25%. Equities followed the tight ranges with the ASX closing lower by 0.2%. Gold traded similarly and closed flat however there was an uptick in activity with Iron Ore and Copper with both trading higher at 2.8% & 1.2% respectively. There is little in the way of local data today save the quarterly Private capital expenditure report which measures the total new cap expenditures by private businesses when adjusted inflation. With the US now enjoying Thanksgiving holidays, markets are likely to be relatively quiet to round out the week.
USD
AUDUSD has been trading downwards due to a slew of data release across the United States on Wednesday which continued the strong Big- Dollar theme of late, opening at sub 0.72 for the first time in 8 weeks, currently at 0.7195. To last night's data, and US jobless claims printed at 199k, down from 270k and better than expectations of 260k while continuing claims were 2.049 million, down from 2.109 million though worse than expectations of 2.032 million. October Durable Goods Orders came in at -0.5%, down from -0.4% and worse than expectations of +0.2% though the ex-transport measure was +0.5% as expected. Q3 GDP was revised up from 2.0% to 2.1% though this was short of expectations of 2.2% while Personal Consumption was revised up to 1.7% against expectations of no change at 1.6%. Core PCE was unchanged at +4.5% as expected. FOMC minutes came and went without too much market impact as the expected tone of hawkishness was delivered. Wall St remained flat on the day while the USD consolidated its gains on the day. Despite the mixed results, AUDUSD still traded lower through the night and into the morning session. After last night's busy schedule, data takes a break with Thanksgiving Holiday which despite technically only occurring on Thursday traditionally extends to the weekend.
EUR
The AUDEUR has traded a meagre 35 pips range in the last 24hrs, opening flat at 0.6423 this morning. In what was a light evening of data, German November IFO Business confidence index fell short of expectations at 96.5 vs 96.7 forecast, reaching a 7-month low. European equities were also disappointing overnight despite opening with modest gains, though finishing in the red with the DAX underperforming as Covid cases in Germany continue to rise. ECB president Lagarde is on the wires tonight and tomorrow night, markets will be sensitive to any positive overtones derived from Tuesday night's impressive European PMIs. Also to watch here is the ongoing lockdowns and social unrest evident in Austria and The Netherlands.
GBP
AUDGBP is also trading horizontally, trading just a 24 basis point range and opening at 0.5395 this morning. All week the AUD has been struggling to hold any sort of footing above 0.5400, however so far has managed to hold what has been a very strong GBP at bay. This may change with the Bank of England’s Bailey set to speak in the early hours of tomorrow morning, market participants looking for clues as to the timing of what is expected to be an imminent Bank of England rate hike.
NZD
The AUDNZD opens higher this morning at 1.0465 after the RBNZ hikes rates by 0.25% as expected on Wednesday. But with the accompanying statement not as hawkish as anticipated the Kiwi Dollar actually lost ground in what is a rather contrarian result. This marks the second consecutive increase in rate hikes in New Zealand where the rate now sits at 0.75%. RBNZ have said they expect the cash rate to be at 2.25% by the end of next year. Adding to the NZD momentum, this morning's Trade Balance data was better than expected, showing a deficit of $1286mio compared to $1575mio expected.