Big Night Ahead for the US Dollar
AUD
The Aussie Dollar opens this morning mixed against the majors, with most pairs seeing minimal change since yesterday's open given little meaningful economic data over the past 24h. Commodities were soft into the close, with Gold up 0.3%, Silver up 0.1%, Iron Ore up 0.8% and Copper down 0.6%. Asian equities finished the day in the red, with the ASX down 1.3% and Shanghai Comp down 0.8%. Yesterday, we had NAB Business Confidence come in lower at -3, previously at 2. Today at 11:30am out of China we have their CPI y/y and PPI y/y set to be released, both set to increase from 0.3% to 0.4% and -2.5% to -1.5% respectively. The uptick in consumer prices is likely supported by holiday tourism during the Golden Week, yet weighed down by falling food (excluding pork) prices. This data gives key insight into how the Chinese economy is trying to recover from harsh Covid lockdowns crippling their economy, showing whether they are back on the road to growth.
USD
The AUDUSD keeps a tight formation over the past 24 hours, with the pair just ducking under the 0.66 barrier for most of the night, sticking its head back up for this morning’s open of 0.6607. Wall Street had a mixed performance, with the DOW JONES down 0.3%, S&P 500 up 0.3% and the NASDAQ up 0.9%. Little meaningful US data yesterday ahead of tonight's heavy-hitting events - being the most important night of the month in terms of US data. It starts with their inflation figures, with the CPI y/y and Core CPI m/m both expected to remain unchanged at 3.4% and 0.3% respectively. The CPI m/m figure expected at 0.1% m/m (prev. 0.3%), which would be the smallest rate of increase since October 2023. Following this is the Fed interest rate decision, with the Federal Funds Rate expected to remain unchanged at 5.50%. Following this we have the FOMC Statement, FOMC Press Conference and quarterly FOMC Economic Projections. There is ample opportunity for the US central bank to outline their views on major economies initiating cuts, as well as if they have moved their cutting timeline from September at the earliest.
EUR
The AUDEUR pushes higher since yesterday morning, with the pair taking a dip in the morning session, after which it pushed to a 3-week high, opening this morning at 0.6152. European equities took a hit yesterday, with the DAX down 0.7% and the CAC down 1.3%. There was no news out of the union yesterday, with this afternoon having German Final CPI m/m being released, expected to remain unchanged at 0.1%.
GBP
The AUDGBP sees some volatility yesterday, with the pair chopping back and forth, opening this morning flat at 0.5185. British equities finished the day in the red, with the FTSE closing down 1%. Looking at the news, Claimant Count Change was released, coming in much worse at 50.4k, expected at 10.2k from a previous 8.4k. Despite this huge miss, the effects on the markets was muted, retracing any movement that was seen. Average Earnings Index 3m/y came in unchanged at 5.9%, expected to lower to 5.7%. The Labour market seems to be tough for the brits in these high interest rate environments, adding pressure on the BOE to initiate cuts soon. Tonight, the GDP m/m is set to be released, expected to drop from 0.4% to 0.0%, showing more pain for their economy; painting a grim picture in the UK.
NZD
The AUDNZD softens in the past 24 hours, with the pair steadily trickling down since yesterday, opening this morning at 1.0754. This morning there was Visitor Arrivals m/m released, coming in lower at -9.4%, previously at 9.7%. There is no news set to be released today, with the next piece coming out on Friday.