Post-RBA AUD Rally Runs out of Steam

AUD

The Aussie is down slightly against the majors with the exception of the NZD and Yen. The upward trend caused by the RBA’s unexpected rate hike on Tuesday may have experienced a slight bump when the Bank of Canada unexpectedly raised interest rates by an oversized 50bps instead of the expected 25bps. The similar timing of the sudden drop in AUD overnight suggests there was spill over into other currency crosses, perhaps the Bank of Canada threw some shade at the RBA's "meagre" 25bps from Tuesday. Yesterday Australian GDP q/q printed slightly below expectation, coming in at 0.2% instead of the expected 0.3% growth for the first quarter of 2023. Looking to AUD-related commodities, Gold was flat, Silver also flat, Iron ore was up 1.5% and Copper lost -0.3%. Chinese Trade balance printed later in the afternoon showing an unexpected decline in level of exports, with growth expected on the previous month’s numbers. Some analysists saw the May slump in China exports as part of the broader manufacturing slump globally, evident in the sharp decline in new orders seen in various countries’ May PMI surveys. Later today the Aussie trade balance will print, and Chinese CPIs and PPIs out tomorrow.

USD

The AUDUSD pair hit a high of 0.6716 over night before falling a full 1% to 0.6653 this morning, down on yesterday’s open levels. The S&P500 was down -0.4%, NASDAQ lost -1.3%, and Dow Jones gained 0.3%. Data wise, out of the US yesterday we had Crude Oil Inventories, coming in below the expectation of 1.2M barrels added, at -0.5M barrels. US consumer credit also came in higher than expected at 23B, vs 22.2B expectation. The last big currency moving data piece out of the US tonight is the Unemployment Claims, expected to rise slightly from 232,000 to 236,000.

EUR

The Aussie is down against the Euro, opening lower this morning at 0.6217 after reaching an overnight high of 0.6257. The DAX and the CAC both suffered minor losses overnight being down -0.2% and -0.1% respectively. Yesterday, a few minor pieces of data printed out of the EU’s major economies; German Industrial Production came in worse than expected at 0.3% vs 0.7% expectation, French Trade Balance came in with unexpected higher imports, hitting -9.7B vs -7.7B expectation, and Italian Retail sales were down 0.2% vs 0.3% expectation. French Private payrolls is out this afternoon, as well as Eurozone Employment change q/q, and Revised GDP q/q.

GBP

The Aussie is down against the pound sterling after a slow meander upwards yesterday, the pair fell about 0.5% overnight to its current price of 0.5344. A quiet rest of the week for UK economic data with nothing printing after the RICs house price balance -30% versus the expectation of -39%.

NZD

The Australian dollar is sitting at a 4-month high against the Kiwi, pushing past the 1.10 level yesterday evening, currently sitting at 1.1026. Manufacturing Sales q/q saw a -2.8% drop vs the -1% last quarter. A quiet period for New Zealand economic data until GDP q/q next week.