AUD Consolidates Last Week's Gains
AUD
The Australian dollar had a strong finish to last week, consolidating gains and opening on the front foot on most crosses. Asian equities were mixed on the close with the Nikkei up 2.6% and the CSI flat. The ASX underperformed finishing Friday’s session down 0.5%, in a broader decline across sectors, with energy the outlier up 2.3%. There is no major data coming out of Australia today, but there's plenty of data from China with Retail Sales y/y one of the highlights being released at 12pm, forecasted at 5% anything greater could potentially help strengthen the Australian dollar. Also of note at 12pm today is Chinese Industrial Production and the Unemployment Rate which is expected to remain at the current 5.5%. Looking to the week ahead, and tomorrow's Monetary Policy Meeting Minutes are the highlight of the Australian calendar. The other major piece of data coming out of Australia is the wage price index q/q on Wednesday with the RBA watching closely for increases in wages.
USD
The AUD opens slightly higher there this morning at 0.7124, appearing to have hit resistance around the 0.7130 mark. The USD wasn't able to capitalise on stronger than expected prelim UoM Consumer Sentiment figures which came in above forecast of 52.5 at 55.1, with the Antipodeans trading strongly into the New York close. A strong finish to the week on Wall St with the NASDAQ gaining +2.1%, the S&P 500 +1.7% and the Dow Jones 1.3%. The data for the week kicks off tonight with Empire State Manufacturing Index but the main event for the week will be Wednesday's Retail Sales figures with the Fed Reserve watching closely for any hints at reductions in consumer spending.
EUR
AUDEUR traded strongly into the end of last week, reclaiming the 69 handle and opening at 0.6938, highs not seen since early April this year. European equities didn't miss out on the buoyant mood, closing generally with gains expect the CAC which unperformed at 0.1%. Early Friday’s data presented French 2Q Unemployment which rose to 7.4%, higher than consensus of 7.3%, however Euopean Industrial Production numbers showed better than expected gains of 0.7%. There are scattered pieces of data from the EU throughout the week ahead, starting tonight with German Wage Price Index (WPI), but Wednesday's GDP figure will be the highlight.
GBP
AUD continued the trend of strength here, trading steadily higher to open this morning at 0.5866 which is almost 5 year highs. To the data and on Friday afternoon the GDP data showed the UK economy shrank 0.6% in June m/m, beating expectations of -1.2%, however this wasn't enough to stop the bleeding for the beleaguered Pound. Industrial Production and Industrial Output numbers were also better than expected. The FTSE did benefit from the positive data, closing 0.3% higher. Looking to the week ahead and there's no data due for release tonight, Wednesday's evening's CPI data will be key, currently sitting at 9.4% for the year and expected to increase to an eye watering 9.9%.
NZD
This is the only cross AUD doesn't open stronger against this morning, AUD trading only slightly lower at 1.1037 at time of writing. Friday morning's Food Price Index m/m from across the ditch printed at 2.1% which was in increase on the prior 1.2%. This may have given the NZD a strong footing to trade on leading into the weekend. Looking ahead and the RBNZ will meet on Wednesday to decide on interest rate movements with markets expect a 50bps increase which would leave the interest rate at 3.0%.