EURUSD Breaks Below Parity
AUD
The Aussie dollar started the week positively against most majors, with the key exception remaining the US Dollar where Aussie traded flat, unable to overcome the currently indominable USD. With risk sentiment souring, the ASX and the NIKKEI printed red on close falling 0.9% and 0.5% respectively, with only the Shanghai Comp in the green gaining 0.6% on close. In Commodities Gold lost some of its lustre down 0.7%, with Iron Ore fairing similarly down 0.6%. It has been a quiet session in terms of Australian macroeconomic news over the last 24 hours, however in Chinese news the CCP announced plans for $29 billion in special loans to troubled developers. These loans will be used to ensure stalled housing projects are delivered to buyers and will be the biggest financial commitment yet from Beijing to help contain the property crisis. This morning's local data showed Flash Manufacturing PMI printing 54.5, just short of 55.7 previous, and the Flash Services PMI printing 49.6 with a previous of 50.9, meaning both had just missed the mark but AUD has remained firm so far.
USD
The AUDUSD opens flat this morning at 0.6878 which is actually a good result for AUD considering how strong USD has been against other currencies. Overnight Wall St followed the lead of Asia and Europe, trading lower as the Nasdaq finished down 2.55%, with the DOW JONES and S&P 500 trailing close behind down 1.9% and 2.1% respectively. Risk sentiment has taken a hit with Gas prices in the US rising to 14 year highs and the USD safe haven appeal has been triggered, pushing the DXY to its strongest level in almost 20 years. Also illustrating USD strength, one US Dollar is now worth more than one Euro Dollar (see below). Tonight the US will also release Flash Manufacturing and Services PMIs, along with some Home Sales data.
EUR
AUDEUR opens significantly higher this morning at 0.6920, trading higher now than AUDUSD for the first time in 20 years! As was common around the globe, a downturn in risk sentiment partially driven by 20% increases in Gas prices across Europe mean European equities were heavily in the red with Euro Stoxx 50 declining 1.3%, the CAC falling 1.8% and the German DAX fairing the worst down 2.3% on the close. With EURUSD breaking well below parity, trading at 0.9942 this morning, general weakness in the EUR has overflowed into other crosses which is good for EUR buyers. No data from the Zone overnight, however tonight we will get Flash Manufacturing & Services PMIs from France, Germany and the EZ as a whole. All numbers are expected to show a decline on previous results which could spell further trouble for the under siege EUR.
GBP
The Aussie continues to rally against the Pound Sterling, currently trading higher at 0.5847 at time of writing. As is uniform across the board, data out of the UK remains light on over the last 24 hours of trading. The FTSE also in the red down 0.2% matching the somber mood across most equity markets. Looking ahead the day of PMIs will bear data from UK Flash Manufacturing and Services PMIs, expected to fall just short of previous results.
NZD
The Aussie Dollar gains against the NZD for another day, currently trading at 1.1137 at time of writing and pushing towards 3 week highs. Data has been quiet from across the ditch, the big-ticket item of the week will be the RBNZ Governor Orr hitting wires due to speak in an interview on Friday morning at the Jackson Hole Economic Policy Symposium, which may give some insight into future rate hikes. This is often relevant to other world banks as the NZD has so far remained the first mover in regards to interest rates.