AUD Struggles as Investors Shun Risk

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AUD

The Aussie Dollar opens mostly lower against the majors as investors evaluate global economic risk sentiment. The markets reflected worsening sentiment in general with the ASX closing -1.2%, as well as gold and silver improving over 1% due to investors flocking to precious metals. Locally, Australia had their monthly Private Sector Credit which met expectations at +0.5% and other commodities showed minimal movements in their prices outside of Natural Gas closing +2.5%. China had their interest rate decision on Friday, deciding to hold the 1-Year and 5-Year Loan Prime Rates, as expected. China is expected to wait and react accordingly to President-Elect Trump’s economic policies once he is inaugurated on January 20. No other news today, with the recent RBA Monetary Policy Meeting Minutes from two weeks ago set for release tomorrow.
 

USD

The AUDUSD opens higher at 0.6246, with the US Dollar weakening significantly due to lower-than-expected US inflation data over the weekend. Their Core PCE Price Index (The US Federal Reserve’s preferred inflation measure) was lower than expected at +0.1% month-on-month vs +0.2% expectations, which could allow the US Federal Reserve to cut interest rates more than two times in 2025, which they forecasted last Thursday. Wall Street had a great trading day on Friday, with Dow Jones +1.2%, S&P500 +1.1% and Nasdaq +1.0%. Tonight, CB Consumer Confidence is expected to show an improvement.
 

EUR

The AUDEUR opens lower at 0.5992, trading between 0.5991 and 0.6015 over the weekend. The DAX and CAC ended Friday slightly down at -0.4% and -0.3% respectively. Today will see monthly German Import Prices m/m, expected to increase 0.5% from last month, with no more economic data out of the Eurozone for the rest of the week.
 

GBP

The AUDGBP opens at 0.4966, trading between 0.4967 and 0.4999 over the weekend. The key data piece out of England was their monthly Retail Sales which increased by +0.2%, however, this was driven by seasonal shopping and was lower than expected. The FTSE also closed -0.3% on Friday. England will have some minor economic data releasing at 6pm today. No more economic data will be released for the rest of the week.
 

NZD

The AUDNZD opens higher at 1.1062, trading between 1.1051 and 1.1091 over the weekend. There was the Kiwi Trade Balance released on Friday, highlighting much more exports than expected. No more news out of New Zealand for the rest of the week.

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