AUD Rises on Stronger Commodity Prices
AUD
The Aussie Dollar opens higher to end the week after a modest gain amid rising gold and natural gas prices, as well as a general improvement in risk sentiment. Overnight, the Caixin Manufacturing PMI showed China's factory activity grew in December, but at a slower-than-expected pace, as overall sales were dampened by falling export orders amid concerns over the trade outlook. Asian equities took heavy losses as Chinese stocks sold off on the first trading day of the year with the Shanghai Comp -2.7% and the Hang Seng -2.2%, whilst Japan’s Nikkei remained closed. Domestically the ASX closed +0.5% after energy and materials buoyed the index. Commodities saw a sharp rise for precious metals with Gold +1.2%, and Silver +1.8%, while Iron Ore, and Copper closed -0.4%, and flat respectively. No news domestically to end the week with our next major piece of data to be released next Wednesday, where our CPI y/y is forecasted to slightly increase from 2.1% to 2.2%.
USD
The AUDUSD coupling opened higher this morning regaining its 0.62 handle at 0.6205, recovering from over two-year lows as stronger commodity prices provided support, benefiting Australia’s position as a net exporter of key resources. US data overnight showed weekly jobless claims at an eight-month low at 211K from the forecasted 222K. The Final Manufacturing PMI also came through higher than forecast at 49.4 from the forecast 48.3, while Crude Oil Inventories came through less than forecast at -1.2M. US equities closed in the red with the Dow Jones -0.6%, S&P 500-0.4%, and the NASDAQ -0.6%. Another busy night of US data releases with the ISM Manufacturing PMI, and Prices to be released with PMI forecasted to fall from 48.4 to 48.2, while Prices are expected to increase from 50.3 to 51.5.
EUR
The AUDEUR coupling regained its 0.60 handle, opening this morning at 0.6045 after PMI data showed Eurozone manufacturing activity still contracting with the new orders index at a three-month low and traders anticipating deep interest rate cuts from the European Central Bank in 2025, with markets pricing in at least four 25 basis point cuts. Eurozone equities however closed in the green with the DAX +0.6%, and the CAC +0.2%. No major data set for release today out of the Eurozone with only Spanish Unemployment Change, and German Unemployment Change releasing later this evening.
GBP
The AUDGBP coupling opens higher this morning, regaining its 0.50 handle at 0.5007 after the pound fell over 1% after a report that British factory activity shrank at the fastest pace in 11 months, raising questions about the Bank of England holding its policy rate steady. UK equities closed in the green with the FTSE +1.1%. No major data out of the UK today with only M4 Money Supply m/m, Mortgage Approvals, and Net Lending to Individuals m/m set for release late this evening.
NZD
The AUDNZD coupling opens higher this morning at 1.1088 after the Aussie was boosted off of stronger commodity prices. No news set for release from our Kiwi neighbours to end the week, with their next data releases set for next Wednesday January 8 with ANZ Commodity Prices m/m and possibly their GDT Price Index as it has been set as tentative.