AUD Limping Into Weekend

AUD

The Aussie Dollar limping into the weekend, trading weaker on most major currencies, falling mostly on the Euro and USD on weak Aussie Unemployment data and weaker commodity prices which contributed to a risk off environment. Yesterday's labor force numbers showed Employment Change and Unemployment Rates were both worse than expectations, being 33.5K vs 35.5k and 3.5% vs 3.4% respectively. Asian Equites were mixed as the Nikkei and ASX closed up 0.2% however the Shanghai Comp closed lower by -1.2%. Commodity prices across the board had fallen with Crude Oil and Natural Gas bleeding the most, down -3.7% and -5.3% respectively and Silver and Iron Ore closing slightly lower at -0.5% with only Gold closing flat. No domestic data today, however China delivers its Retail Sales y/y and Unemployment Rate amongst other lower tier data at midday.

USD

AUDUSD fell significantly lower overnight, breaking the 0.67 psychological level and opening at 0.6692 which is 2 month lows. USD remained strong despite mixed data overnight, persistent inflation concerns driving bets for interest rates to remain higher for longer in the US. To the data, and August Retail Sales rose by 0.3% MoM to come in higher than expectations of a 0.1% decline though core measures were all weaker than expected. The Philly Fed Business Survey fell to -9.9, down from 6.2 and well below expectations of 2.3. On a more positive note, September Empire Manufacturing rose to -1.5, up from -31.3 and above expectations of -12.9 while weekly jobless claims were better than expected with both initial claims and continuing claims coming in better than forecasts. Wall Street was down across the board as higher inflation fears lingers. Looking ahead and tonight we have Preliminary UoM (University of Michigan) Consumer Sentiment and Inflation Expectations. The rate looks set to test the 2 1/2 year low of 0.6680 at some stage today.

EUR

AUDEUR continues its decline from end of August highs, breaking below the 0.67 psychological barrier this morning and opening at 0.6697 which is 2-month lows. Mixed data from The Zone overnight with German WPI (Wholesale Price Index) m/m and Trade Balance had missing expectations, contrary to the French Final CPI m/m delivering above expectations at 0.5% vs 0.4%. European equities however closed softer with the DAX closing -0.5% and the CAC down a full -1.0%. Onto economic data tonight, Italian Trade balance is released in the lead up to Final CPI y/y with expectations of 9.1% and Final Core CPI y/y with markets expecting 4.3%

GBP

AUDGBP starts the day only slightly lower compared to other major currency pairs opening at 0.5837, experiencing a steady decline since midday yesterday. UK’s FTSE 100 index slightly gained yesterday closing up 0.1%. Data wise, we have Retail Sales data from the UK due tonight.

NZD

AUDNZD closes down after a mixed trading session yesterday, peaking at 5-year highs at 1.1257 before opening at 1.1224 at time of writing. A quiet end of the week for the Kiwi’s with just the BusinessNZ Manufacturing Index releasing this morning at 54.9, an expansionary economic encouragement for NZD. The Wallabies lost another Bledisloe Cup as well.