Uptick in Iron Ore Supports AUD
AUD
Despite a light session of data, the Aussie dollar gains some steam predominantly off the back of higher commodities. Commodities were higher on close with the standout being Iron Ore +3.9%, Crude Oil +1%, Natural Gas +2.4%, Gold flat and Silver +0.2%. Asian Equities also moved slightly higher with ASX +0.1%, Nikkei also +0.1%, and the Shanghai Comp +2.1%. Nothing in the way of local data yesterday, only seeing Foreign Direct Investment ytd/y out of China which came in at 14.5% compared to a previous reading of 6.3% indicating a decent growth of spending on domestic capital investments in China by foreign companies. To the day ahead we will see the Aussie Flash Manufacturing PMI and Flash Services PMI. More importantly we will see the release of the Monetary Policy Meeting Minutes which will give us a more in depth insight on the economic conditions that influenced their most recent interest rate decision as well as give an indication for future hike sizes.
USD
The AUDUSD pair reclaimed the 69 handle overnight after a steady rally that saw highs of 0.6920, before slightly falling off to open this morning at 0.6910. There was no data yesterday with the U.S. observing the President's Day holiday. US Equities saw a mixed close with Dow Jones +0.4%, S&P500 -0.3% and NASDAQ -0.6%. However tonight the US will restart its data releases with the Flash Services PMI and Flash Manufacturing PMI both expected to rise, as well as Existing Home Sales which is also expected to rise.
EUR
The AUDEUR pair saw a half a cent range after it steadily rallied to 1-week highs of 0.6478 before dipping slightly to open this morning at 0.6463. European Equities were mixed on close with DAX flat and CAC -0.2%. A quiet day yesterday for Euro data with only the German Buba Monthly Report and Euro Consumer Confidence which came in flat against expectations of -19. Tonight however we will see Euro data start to pick up with a number of mid-tier releases, with the main ones being the French & German Flash Manufacturing & Services PMIs as well as German ZEW Economic Sentiment, all expected to rise compared to prior releases.
GBP
AUDGBP also saw a fleeting rally overnight gaining over 40 basis points to hit highs of 0.5750 before reversing some gains to open this morning slightly lower at 0.5740. Equities saw little movement with the FTSE gaining only 0.1%. Another quiet day for Pound data with only the release of Rightmove HPI m/m which came in below the previous reading of 0.9% at 0.0%. A slightly busier night tonight with the release of Public Sector Net Borrowing and more notably the Flash Manufacturing & Services PMI’s, where markets have forecasted a slight rise for both PMI figures.
NZD
The AUDNZD opens this morning at 4-month highs of $1.1050 after seeing a peak of $1.1087 late last night. This morning we saw the release of PPI Input and Output q/q, with input reading flat against expectations at 0.5%, and output beating expectations of 0.4% coming in at 0.9%. A busy day for the Kiwis tomorrow ahead of the release of the Official Cash Rate, which is expected to be raised by half a percent, bringing the rate to 4.75%.