Annual Jackson Hole Symposium Begins Tonight
AUD
The Australian Dollar was relatively subdued throughout the overnight session and trades with mixed results this morning. Asian Equities were down on the close as the Shanghai Comp slumped -1.9% while the Nikkei dipped -0.5%. Domestically, the Australian Share market closed +0.5% in the green, driven by strong earnings results in all sectors. Little in the way of data with CB leading index being the only mention as it improved +0.3% MoM, suggesting the economy should keep expanding near term. As for the data this week, it’s been an absent Australian economic docket which has left traders leaning toward US dollar dynamics. The Fed’s annual Jackson Hole Symposium begins later this evening, which should provide fresh impetus for the risk averse Australian Dollar.
USD
AUDUSD trimmed some of the recent gains as USD recovered lost ground ahead of the Jackson Hole, remaining above the 0.69 figure with the pair trading at a rate of 0.6911. US Equities rose overnight, snapping a three-day decline in the Dow and the S&P. The Dow Jones gained +0.18%, The S&P climbed +0.29% and the Nasdaq Composite advanced +0.41%. The US 10-year fell back slightly, moving back towards 3.03%. Oil continued its climb with Brent Crude hitting $101.35 a barrel. In the low tier data overnight, July Pending Home Sales fell by 1.0% MoM and 22.5% YoY, mixed against expectations of -2.6% and -21.4%. No reaction to the data. This evening, it’s a busier economic calendar with the Preliminary GDP QoQ, Unemployment claims and the three-day Jackson Hole Symposium, with Fed Reserve Chair Jerome Powell to speak on Friday morning. Traders expect Fed Chair Powell to reinforce the central bank’s goal of squashing inflation and keeping expectations about future rate hikes in check.
EUR
AUDEUR remained relatively sidelined, trading with minor losses this morning, trading at a rate of 0.6929 at the time of writing. European Equities were relatively subdued at the close with the German Dax up +0.2% while the French CAC gained +0.4%. Little in the way of European Data with Italy’s Mario Draghi said that Italy can cut Russia gas imports to zero from fall 2024 and must never again be dependent on Russian gas. Key events in the Eurozone area this week remain the German Final Q2 GDP Growth Rate, Germany IFO Business Climate, ECB Accounts as well as the German GfK Consumer Confidence report. Price action around the AUDEUR currency, in the meantime, is expected to closely follow geopolitical concerns, fragmentation worries as well as the start of the Jackson Hole Symposium this evening.
GBP
AUDGBP trades within a tight range, reaching a low of 0.5838 before coming back to trade at 0.5855 this morning. The FTSE 100 index ended lower but off its worst levels on Wednesday. At the close, the UK index was down -0.2% at 7,471 points. In lower tier data, a survey published by the confederation showed that 69% of firms expect bills to rise in the next three months, and nearly a third expect them to go up more than 30%. Additionally, one in three businesses said rising energy prices will likely dampen any possible investment in transitioning to net zero emissions. The CBI called for government support to households and firms that needed it the most. There has been little report on for the UK pair with a lighter economic docket. Given that the country is reaching record energy prices and double-digit inflation figures, it may keep the Sterling pressured. The UK docket in the meantime will feature CBI realized sales.
NZD
AUDNZD continued its upward trajectory and inched higher to print a fresh two-month high of 1.11720 before trading at a rate of 1.1167 this morning. AUDNZD remained pressured again this morning, amid downbeat data. New Zealand’s Second Quarter Retail Sales slumped to -2.3% QoQ versus -0.5% prior. The yearly figures also dropped way below the previous reading of 0% to -1.6%. To the data ahead, the second version of the US GDP Q2 will join Personal Consumption Spending (PCE). However, major attention will be given to the RBNZ Governor Orr’s speech this evening at the Jackson Hole.