AUD Holding Firm in Holiday market Conditions

AUD

The AUD has outperformed most of its major peers over the Xmas period as illustrated with the green currency tree above. Hopes of a Santa Claus rally across equities faded, Asian equities closed in the red with the Nikkei the worst performer down 1%. The ASX was down 0.6% in the last trading session before Christmas with tech leading the fall, down 1.6%. Commodities had a mixed performance as well. Gold +0.8%, Silver +1.4% and Iron Ore -0.1%. There has been no significant data that has come from Australia or China since last Friday and the radio silence will continue until this Saturday where we have China's manufacturing PMIs.

Fun fact: Australia's decimal currency notes were introduced in 1967.

USD

AUDUSD made steady ground into the holiday, grinding over 1 cent higher to peak at 0.6775 before retracing back down to its current opening level of 0.6733. Mixed performance for US stocks with Dow Jones +0.1%, S&P 500 -0.6% and NAS100 -1.3%. On Friday US Personal Income for November rose 0.4% to beat expectations of 0.3% though Personal Spending rose 0.1% to fall short of expectations of 0.2%. Core PCE rose 0.2% MoM as expected with the YoY result at 4.7%, coming in higher than expectations of 4.6%. Also released and November Durable Goods Orders fell by 2.1% to print lower than expectations of -1.0% though the ex-transport measure beat expectations. Released later in the session, the University of Michigan Sentiment Survey for December was revised up to 59.7 from an initial reading of 59.1. Inflation expectations data were revised lower with 1 year down to 4.4% from 4.6% while 5-10 year was revised down to 2.9% from 3.0%. Also released and November New Home Sales rose by 5.8% to 640k to beat estimates of a 5.1% contraction to 600k though there were significant revisions. Little reaction to the data. On Tuesday US Wholesale Inventories for November rose 1.0% to easily beat forecasts of 0.3%. Housing data was a little better than expected with the FHFA House Price Index for October coming in flat against expectations of -0.7% while Case Shiller House Prices for October was also modestly higher than expected on a MoM and YoY basis. Today we have no significant data.

EUR

AUDEUR traded in a relatively subdued manner but was able to reclaim the 63 handle, opening 0.5% higher this morning at 0.6322. Commodities were all in the green with Eurostoxx +0.2%, DAX +0.4% and CAC +0.7%. There has been and will not be any data arising from the Eurozone until Friday night where we have Spanish Flash CPIs, which even then most likely won't interest markets.

GBP

AUDGBP has performed strongly, gradually climbing higher to reach fresh 4-week highs at 0.5610 before coming off the boil to open slightly lower at 0.5587 this morning. UK equities were asleep with the FTSE closing flat with no economic data for market participants to digest. This should continue to be the case up until the end of the week where we have Nationwide HPI m/m data.

NZD

AUDNZD has consolidated the gains made last week, maintaining the 1.07 handle to trade at 1.0715 this morning. No data from across the ditch until next week.

Fun fact: There are no snakes in New Zealand.