Commodities Give Aussie Dollar a Small Boost
AUD
The Aussie dollar opens higher against most of the majors this morning after what was a quiet day yesterday in terms of news. Overnight we had our CB Leading Index m/m data come through unchanged for June. Commodities were all in the green with Iron Ore and Silver up 0.1%, while Gold remained flat, with the best performer being Copper up 1.0%. Asian equities followed suit with the Nikkei up 0.9%, ASX up 0.1% and the Hang Seng closing up 1%. Earlier this morning we had our Flash Manufacturing and Services PMI’s released, all underperforming and indicating business activity in Australia’s private sector falling in August as new orders shrank for the first time in five months. Higher interest rates constrained demand for both goods and services, though the labour market remained tight as firms in both sectors raised their workforce capacity with greater confidence of output rising in the 12 months ahead.
USD
The AUDUSD opens higher this morning at 0.6425, although still near 9-month lows. Overnight we had some mixed data out the US with the Richmond Manufacturing Index performing better than expected, while Existing Home Sales came in lower than forecasted. Wall street closed in the red with the Dow Jones -.6%, the S&P 500 -.4%, and the Nasdaq -.1%. We have some important data out the U.S. tonight with the S&P flash PMI for August set to be released. This indicator was signaling a contraction in private-sector business activity in 2022, but has been signaling expansion for much of 2023. This release may receive heightened attention given the composite PMI has fallen lower for two consecutive months through July 23 suggesting the pace of expansion is slowing.
EUR
AUDEUR opens higher this morning at 0.5923 after regaining its 0.59 handle last night. No major news from the Eurozone yesterday with only the Current Account data being released, recording a €36 billion surplus. European equities also performed strongly with the DAX up 0.5% and the CAC 0.6%. Today will see the PMIs for France, Germany, and the EU. Estimates are for both Germany and the EU’s PMI prints to have contracted MoM across all three categories, with France’s to have expanded.
GBP
AUDGBP opens slightly higher this morning at 0.5047, after Public Sector Net Borrowing, and CBI Industrial Order Expectations both came in under forecast yesterday. UK equities remained in the green with the FTSE up 0.2%. Looking ahead at the news we have UK PMIs for July set to be released later this evening, with contraction expected across the board.
NZD
The AUDNZD opens largely flat this morning at 1.0815, having experienced a small rally after some poor performing Retail Sales data was released. No further news for the rest of the week.