AUD Takes a Breath as US Inflation Creeps Lower

AUD

The Aussie Dollar opens generally higher across the majors and the ASX rose 0.5% with Iron Ore miners and Tech outperforming the index. Asian equities were mixed on Wednesday with the Hang Seng falling 1.1% and Nikkei adding 0.6%. Gold and Silver were both higher, gaining 0.6% and 1.8% respectively, supporting the buoyant AUD in the absence of any real economic data locally yesterday. At 11:30am today the Aussie Employment Change and Unemployment Rates will be released, forecasted at 20.8k news jobs and a reduction in the Unemployment Rate to 3.6%. Markets are obviously expecting to see some damage to the labor force statistics in the wake of 10 consecutive interest rate hikes. If employment  stats can stay resilient, then the RBA will be more likely to pull the rate hike lever again this year.

USD

AUDUSD opens higher at 0.6695, having peaked at 0.6723 overnight after the US inflation data release. Wall St sold off before close with the Dow losing 0.1% on the day while the S&P closed down 0.4% and losses on the Nasdaq were around 0.8%.To the main event, and last night's US CPI for March printed at 0.1% m/m and 5.0% y/y with the results both 0.1% lower than expected. Core measures matched expectations at 0.4% m/m and 5.6% y/y and while the US Core CPI met the 0.4% forecast, there is still no satisfying progress toward achieve the Fed 2% inflation target. Also overnight, the FOMC Minutes showed that many Fed officials lowered their views of peak rates in response to recent banking issues and stressed the need for policy flexibility. Also of note and Fed staff projections predicted a mild recession starting later in the year. Tonight's data includes PPI m/m and Core PPI m/m which are both forecasted at 0.0% and 0.2% respectively. 

EUR

AUDEUR opens marginally lower at 0.6089, rejecting an upside movement overnight with highs of 0.6122.  European equities pared early losses to close largely in the black whilst the economic calendar for the day was bare. This evening markets will have some data to digest with German Final CPI m/m as well as Industrial Production m/m, which is forecasted at 0.9%. Also both the G20 and IMF meetings will continue tonight following a formal statement covering policy shifts and meeting objectives after the meetings have concluded.

GBP

AUDGBP opens slightly higher at 0.5361 this morning, peaking at a one-week high of 0.5395 overnight. No data was released yesterday, however the FTSE closed higher by 0.5%. Overnight BOE’s Governor Bailey spoke about the resilience of the global financial system which followed a second speech on financial and price stability at the Monetary Fund Spring Meeting. There is a massive data dump due for release from the UK tonight, the most important pieces of information being GDP m/m, Construction Output m/m, Industrial Production m/m and finishing with MPC Member Pill delivering a speech. Potential for some volatility here overnight, can the AUD find a foothold in what has been a very slippery slope against the GBP of recent?

NZD

AUDNZD continues the upward trend of the last week, opening higher again this morning at 1.0769. No economic data to pour over from across the ditch until tomorrow, so today's Aussie employment report will likely dictate movements here in the short term.