AUD Flat in Subdued Trade
AUD
The AUD traded fairly flat across most currencies, while making modest gains against the NZD. The US Equities had a quiet overnight session, which would help explain the AUD's rather flat performance. The AUD made some slight gains across the board after some strong Quarterly GDP Data was released, coming in at 1.8% (vs exp 1.5%), before quickly returning to previous trading levels. Commodities were down during the overnight session, with Iron Ore and Copper recording losses of -0.9% and -1.2% respectively. This would have added some downward pressure on the AUD, yet it still managed to hold its ground. The Australian monthly Retail Sales number is due to be released later this morning, if the data follows the trend of yesterday’s strong GDP Statistics, the AUD could experience some upward strength.
USD
The AUD/USD trading fairly flat against yesterday’s levels, currently trading at a rate of 0.7746 at time of writing. US Equities had a modest overnight session with the S&P500 and NASDAQ both gaining 0.1%. The AUD has been known to hold a correlation with US Equities, which would help explain the AUD's flat performance. The Fed’s Harker stated that it might be time to “think about thinking about tapering”, the FED has been becoming more and more hawkish throughout the past couple of weeks, as such the market had little reaction to the comments, expecting the Fed to turn up the tapering talk a few degrees. Markets await the release of the US ADP Non-Farm Employment Change and Unemployment Claims later tonight. ISM Services PMI is also scheduled to be released later tonight. Deviations for expectations could see significant market movement, as investors use this to gauge on economic health.
EUR
The AUD/EUR also trading fairly flat during the overnight session, coming in at a rate of 0.6342 at time of writing. EUR had many small data releases late yesterday afternoon, most notably, the Spanish Unemployment change saw a decrease of -129.4K (vs exp -115.2K), which is the largest fall on record. Shortly after, the Monthly PPI also beat expectations reaching an increase of 1% (vs exp 0.9%). However, the markets had little reaction to the data, and the AUD still managed to hold its ground. Europe is scheduled to release Spanish, Italian, French, German and final service PMI data later today, no significant market movement expected.
GBP
The AUD/GBP trading slight lower than yesterday’s levels, currently trading at a rate of 0.5466 at time of writing. The UK Monthly Money Supply data, which shows the change in total quantity of domestic currency in circulation and deposited in banks, fell short of expectations coming in at 0.1% (vs exp 0.7%), however this didn’t seem to effect the GBP strength. The UK released news that they were starting negotiations to join the Asia-Pacific CPTPP trade treaty. The UK also scheduled to release Service PMI data later tonight, investors more likely to be focused on the BoE’s Governor Bailey, whom is booked to speak tomorrow.
NZD
The AUD/NZD has managed to reclaim the 1.0700s, being one of the only major currency pairs to make gains last night, currently trading at a rate of 1.0709 at time of writing. Markets in waiting for RBNZ Governor Orr to speak tomorrow, any comments that give incline to the central banks change in policy or future plans could influence investors.