AUD Struggles as Markets Shed Risk
AUD
The Aussie Dollar completes its fifth consecutive weekly loss, opening either lower or flat against the majors with risk sentiment down and growing concerns about China’s economic health. We've also recently seen AUD weakness off a dovish RBA, with increased bets of a rate cut in February, as well as inflationary concerns from the Fed which has strengthened the US Dollar. Asian equities rounded out the week mixed with the Nikkei +1.8%, Hang Seng flat Shanghai comp +0.1%, and Shenzhen -0.2%. Domestically, the ASX finished +0.5% as consumer discretionary, and financials drove gains. Commodities also saw a mixed close with precious metals down Gold -0.5%, Silver -1.0%, while Iron Ore saw an increase +1.1%, and Copper flat. It will be a quiet week domestically with no major releases however tomorrow there will some Chinese PMI releases at 12:30pm which will be closely watched.
USD
The AUDUSD coupling sees no improvement, opening flat at 0.6217 despite Crude Oil Inventories printing at 4.2M barrels, much lower than forecasted at -0.7M. Wall Street on the other hand closed weaker with the Dow Jones -0.8%, S&P 500 -1.1%, and the NASDAQ 1-5%. It will be a quiet week for all news releases entering 2025 with Chicago PMI and Pending Home Sales m/m set for release overnight both forecasted to improve. No further major data for the weak until Friday with Unemployment claims.
EUR
The AUDEUR continues the losing streak, opening the week lower at 0.5963 with risk sentiment remaining stagnant, pulling the AUD down. Eurozone equities closed in the green with the DAX +0.7%, and the CAC +1.0%. Looking at Eurozone data releases, later this evening at 7pm we will get the Spanish Flash CPI y/y which is forecasted to increase from 2.4% to 2.6%. No further major releases for the week, however, on Thursday there will be a myriad of Final Manufacturing releases for the Eurozone.
GBP
The AUDGBP opens the week lower, dropping further Friday evening at 0.4936. The FTSE closed in the green, slightly up at 0.2%. It will be a quiet week for UK data releases with nothing major to look out for with only Nationwide HPI m/m and UK Final Manufacturing PMI set for release late Thursday Evening.
NZD
The AUDNZD coupling opens the week lower at 1.1031, dropping late Friday evening retracing early this morning. No news set for release from our Kiwi neighbours this week however looking at 2025 the Reserve Bank of New Zealand is widely expected to cut by 50 basis points when it next meets on February 19th. The current 4.25% cash rate is seen reaching 3.0% by the end of next year.