Struggles Continue for Aussie Amidst Quiet Week.
AUD
An absence of Asian data and a subdued session in markets had the Aussie dollar lagging into the red, even stronger commodities could offer little respite for the AUD. Asian equities finished higher to start the week, with the Hang Seng the star performer up +2.5%, as more reopening news from China hit the wires, though conflicting reports create a smokescreen of reality in China. The ASX rose +1.9%, in a broad-based rally, with bank stocks rebounding strongly. Commodities had a good day with Gold, and Iron Ore both finishing up +1.4% and +0.5% respectively. A quiet Monday in currencies is likely to be followed by a similarly sedate Tuesday, as the Asian data calendar remains bare. The Aussies trajectory will take direction from the Greenback this week as Asian data dries up, there could be little to support the AUD with central bank talk also on hiatus for the week.
USD
The AUD/USD is settling to find comfort in the 0.69s as recessionary fears across the globe have currency markets flocking to the Greenback as a rush to safety, the pair trading at 0.6922. US equities finished lower, but only marginally so after trading in the black earlier in the session, 0.2-0.3% type losses from the Dow Jones & S&P 500. US Treasuries slipped, pushing the rate on the 10-year note to 3.14%. Some positive data from the US, Durable Goods Orders for May rose by +0.7% to beat forecasts of a 0.1% increase, whilst Core Measures were also up +0.7% beating estimates of +0.3%. Also strong were US Pending Home Sales for May which rose by 0.7%, beat forecasts of a 3.5% contraction. USD index positions ticked a little higher having surged to their highest levels since March 2017 last week, as the market prepares for another bumper hike from the Fed this month. Moving forward will see the release of the CB Consumer Confidence index for Jun, with the Richmond Manufacturing index shortly after.
EUR
The AUD/EUR continues to take a cooler away from recent highs as cautious optimism crept into Europe ahead of this week’s key ECB meetings, the pair now trading at 0.6543. European equity markets were a little mixed at the closing bell with the DAX gaining more than +0.5% on the day, though other indices closed in the red with the CAC shedding -0.4%. Russia is believed to have defaulted on its debt for the first time since 1998 after missing a key deadline. Russia is believed to have funds to make payment, which was due on Sunday, but sanctions made it impossible to get the sum to international creditors. The EU Energy Commissioner has said Russian gas supply to the EU has halved from the level it was at last year, adding that it could decrease further. The European Central Bank hosts this week the Forum on Central Banking in Portugal, with President Christine Lagarde offering the welcoming remarks. On Tuesday, several ECB members will be on the wires as per their participation in the aforementioned forum, while leaders from around the world will speak on Wednesday.
GBP
The AUD/GBP remains largely unscathed and unchanged as fresh Brexit woes keep the Pound in check, trading at 0.5642 this morning. Proposed legislation to allow the UK to unilaterally rip up Brexit arrangements for Northern Ireland, even at the risk of a trade war with the EU, passed the second reading stage in the House of Commons on Monday night. Nothing else of note to report on from the UK. BoE Governor Bailey will speak at the ECB forum on Wednesday as the key British macro-economic event for the week.
NZD
The AUD/NZD continues to teeter at the 1.10 mark without any major swing in either direction to push it over or off the edge, trading at 1.0992 right now. NZD remains fairly range-bound, bouncing around with the general vibe of global sentiment with limited data releases. First worthwhile piece of data will be the RBNZ’s Statement of Intent which outlines the banks objectives for the next three years.