AUDUSD Tests Familiar Levels
AUD
Improving risk sentiment paired with a strong performance from commodities pushed the Aussie Dollar higher overnight, opening this morning in the green against major currencies. Notably, the AUD continues to test the 0.6620 - 0.6640 range against the USD, having done so several times since January in an attempt to break through. Asian equites closed mixed with the ASX -1.1%, Shanghai Comp +0.8% and Nikkei -0.3%. Commodities were mainly higher with Crude Oil +0.8%, Natural Gas +1.1%, Gold +0.7%, Silver +0.8%, Iron Ore -0.3%, and Copper +1.3%. A quiet day for local data yesterday. From China we saw some low tier data in the form of their Trade Balance which came in slightly better than expectations. Tomorrow morning will bring Consumer Price Inflation (CPI) and Producer Price Inflation (PPI) releases from China. CPI is expected to trend a little higher (+0.2% y/y) for the third consecutive month, with China's inflation largely expected to remain low for a little while before picking up more noticeably in the second half of the year. PPI is expected to deteriorate further, with the figure predicted to land at -2.3% y/y (prev. -2.8% y/y). Any surprise results could shift the Aussie Dollar.
USD
The AUDUSD pair reclaims the 0.66 handle overnight, opening this morning over 40 basis points higher at 0.6623. The pair are once again testing the 0.6620 - 0.6640 range, having tested the area many times since January before retreating. Wall street saw decent enough gains in yesterday’s session with the Dow Jones +0.8%, S&P500 +0.5% and NASDAQ +0.3%. US weekly Jobless Claims data was a little weaker than expected with initial claims rising to 231k to come in higher than forecasts of 212k. This shows the Fed's interest rate hiking campaign continues to take effect, impacting the US labour market. To the night ahead, we will see FOMC Member Bowman Speak as well as the Prelim UoM Consumer Sentiment and Prelim UoM Inflation Expectations. Overall, it's been a relatively quiet week for the USD. Next Wednesday, we'll see their important consumer inflation report.
EUR
The AUDEUR pair ticks higher overnight, gaining 20 basis points to open this morning at 0.6139. European equities closed in the green with DAX +1% and CAC +0.7%. No data out for the Eurozone yesterday as French and German banks were closed in observance of Ascension Day. A quiet end to the week with only Italian Industrial Production m/m and ECB Monetary Policy Meeting Accounts. The Accounts will likely shed further light on the central bank's decision to hold the Eurozone major interest rate at 4.5% recently, while giving insight into the reasoning behind the decision.
GBP
The AUDGBP touched new highs for the year of 0.5287 off the back of the Bank of England’s interest rate hold, maintaining that level to open this morning at 0.5281. UK Equites closed slightly higher with the FTSE 0.3%. Last night, the Bank of England decided to keep interest rates unchanged at 5.25%, with 7 voting in favour of a hold and 2 in favour of a cut. This contrasted market expectations of a unanimous push to hold rates, with the Pound weakening in the aftermath. The focal point of the meeting was the release of the second Monetary Policy Report of the year. As predicted, there was an upward revision in growth forecasts, while inflation projections for the UK saw a significant downward adjustment. Looking to the day ahead, we are expected to see both GDP m/m and Prelim GDP q/q, with GDP m/m expected to remain at 0.1% and Prelim GDP q/q to tick higher from -0.3% to +0.4%.
NZD
The AUDNZD opens only slightly higher this morning, gaining just over 10 pips higher to 1.0963. This morning, we saw the BusinessNZ Manufacturing Index come in slightly higher than previous readings of 46.8 at 48.9. No other data out until Monday’s Inflation Expectations q/q.