USD Weakens Ahead of Fed Rate Decision

AUD

The AUD has strengthened against most major currencies over the past 24h, particularly against the USD, with the exceptions being the Pound and Kiwi Dollar as we open flat against those. This comes after an improvement in global risk sentiment and a generally positive performance among commodities which saw Crude Oil +2.7%, Iron Ore +1.5%, Gold +0.2% and Silver +0.1%. Asian equities began the week mixed, the Nikkei -0.7%, Hang Seng +0.3%, and Shenzhen -0.4%. Onshore, the ASX closed +0.3%. We saw no domestic data yesterday, plus nothing on the cards today. Chinese banks will remain closed in observance of the Mid-Autumn Festival. Our main event this week will be Australia's employment figures, on Thursday morning. The Unemployment Rate is expected to hold steady at 4.2%, while an extra 26.4k people are expected to have been employed over the past month, being about half of the previous figure.
 

USD

AUDUSD kicks off the day at 2-week highs of 0.6751 after a general improvement in global risk sentiment overnight. Notably, the Empire State Manufacturing Index showed that business activity grew in New York State for the first time in nearly a year. A quieter session saw mixed results on Wall St. with the Dow Jones closing +0.5%, the S&P 500 +0.1%, and the Nasdaq -0.5%. Tonight, coming out of the US will be their Retail Sales figures. Markets expect the headline figure to increase +0.2% month-on-month, while the Core figure (which excludes automobile sales) is expected to show a -0.2% reduction. The figures will help determine whether last month's surprise +1.0% surge in consumer spending was a blip or the start of a trend. The Fed will be watching tonight's data ahead of their interest rate decision later this week. 
 

EUR

AUDEUR opens higher this morning at 0.6067 given the general improvement in global risk sentiment overnight. The Italian Trade Balance came out higher than expected (6.74B) and the Eurozone Trade Balance (15.5B) - Each had little impact on currencies. The DAX and CAC both dropped overnight -0.35% and -0.2% respectively. Out tonight, German ZEW Economic Sentiment and ZEW Economic Sentiment. The main event this week will be Final Core CPI y/y and Final CPI y/y out on Wednesday.
 

GBP

AUDGBP opens flat this morning at 0.5106, having traded a thin range throughout yesterday's session, touching lows of 0.5097. The Rightmove HPI m/m increased by 0.8%. (prev. -1.5%), reflecting another increase in UK house prices. The FTSE traded flat yesterday. Tomorrow afternoon, CPI y/y is expected at 2.2%, in line with the previous figure, ahead of the Bank of England's interest rate decision on Thursday evening where the central bank is expected to hold their Official Bank Rate at 5.00%. The rate is expected to be held steady, reflecting a cautious approach due to persistent inflation (particularly in the services sector) and elevated UK wage growth.
 

NZD

AUDNZD opens flat at 1.0891 after hitting highs of 1.0929 overnight. No data out today for the Kiwis. Their main event this week will be GDP q/q forecasted to drop -0.4% (prev 0.2%), on Thursday morning.