Commodity Strength Helps Aussie Dollar
AUD
The Aussie Dollar opens higher across the board against the majors this morning, after a slow ascent overnight due to well-performing commodity prices with Copper up 1.3%, Iron Ore up 0.8%, and Gold and Silver both up 0.4%. Asian equities on the other hand came through mixed with the ASX up 0.2%, Shanghai Comp down 0.7%, and the Nikkei up 0.9%. Looking ahead, later on in the morning we have our Westpac Consumer Sentiment and NAB Business Confidence release at 10:30am and 11:30am respectively.
USD
The AUDUSD coupling rallied overnight, regaining its 0.66 handle opening this morning at 0.6604. Wall Street kicked the week off slow with the Dow Jones, S&P 500 and NASDAQ all hovering around flat on the day. Another quiet data session ahead with only the NFIB Small Business Index set for release tonight at 8pm, and RCM/TIPP Economic Optimism set as tentative. All eyes however will be focused on the US CPI releases tomorrow night with Core CPI m/m and CPI m/m each expected at +0.3% (prev. +0.4%) while the headline figure is expected at 3.4% y/y (prev. 3.2%).
EUR
Overnight, the AUDEUR reached 0.6092 highs, being unseen since January, before retracing and opening this morning at 0.6081 despite some mixed performing Eurozone data yesterday. Eurozone equities closed in the green with the DAX up 0.8% and the CAC up 0.7%. A quiet day ahead for Eurozone news releases with only the French Trade Balance set for release this afternoon at 4:45pm which is expected to increase from the previous -7.4B to -7.0B. This week's highlight for the Eurozone calendar will be Thursday evening's European Central Bank (ECB) meeting. While they are expected to hold the Main Refinancing Rate at 4.5%, they have a much clearer disinflationary backdrop (compared to the Fed) with which to support an easing cycle.
GBP
The AUDGBP couple opens higher this morning at 0.5213 despite this morning’s BRC Retail Sales Monitor y/y release coming through at 3.2%, from the expected 1.8%. Looking at UK equities, the FTSE closed in the green up 0.4%. It will be a quiet week for news releases out of the UK, with the main focus being this Friday with their GDP m/m set for release, which is anticipated at +0.1% (prev. +0.2%).
NZD
The AUDNZD opens slightly higher this morning at 1.0948 after this morning’s NZIER Business Confidence release came through much lower than previous at -25, showing business confidence is waning in the face of weak demand. No further news for the day, however, tomorrow we will have the release of the NZD’s Official Cash Rate. Expectations are that the central bank will keep the Official Cash Rate at 5.5% for a sixth straight meeting even though the economy has slumped into a double-dip recession, they expect policymakers to stress the need for rates to stay restrictive for a prolonged period to tame inflation.