Currency Update - Monday 11th November 2019
AUD
A quiet end to the week saw AUD settle back towards the bottom of the weekly trading ranges. Currencies should remain quiet today with an empty Asian session followed by holidays in France, Canada and the US tonight. Local data is due to pick up on Wednesday with Wage Earning data and then Thursday’s employment report will add the next chapter of a story being closely watched by the RBA. Chinese data is interspersed throughout the week; will recent macro weakness continue or will we start to see the effects of PBoC easing as stimulus measures kick in?
USD
AUD closed the week lower in the face of diminished hopes of an imminent trade deal, opening at 0.6856 this morning. It was President Trump pouring cold water on the trade deal saying he had not agreed to rollback tariffs on China though China would like him to do so. He did however say that he could sign a deal in Iowa and any deal signing will take place in the US. The USD strengthened in the aftermath, the DXY (an index measuring broad USD strength against a basket of other currencies) gaining 0.3% and Wall Street also closed the week at new record-highs. Veteran’s Day holiday in the US tonight so flows will be limited before the US data starts to flow on Wednesday.
EUR
AUD closed on Friday off the mid-week highs although still comfortably holding on to the 0.62 handle. Data from The Zone is sparse this week with Thursday’s German Preliminary GDP for Q3 the highlight. French banks are closed today for Armistice Day in what promises to be a quiet overnight session.
GBP
AUD opens this morning right in the middle of the last week’s trading range at 0.5365. Late on Friday Moody’s changed their outlook on the UK from stable to negative citing that UK economic and fiscal strength are likely weaker than previously assumed and more susceptible to shocks. The economic data will come thick and fast this week, starting tonight with Preliminary GDP for Q3, improved growth of 0.4% expected. Wednesday and Thursday also yield fodder for data hungry markets with CPI and Retail Sales respectively. Election developments also are a constant presence with current polls currently showing Boris would lead a large majority (for what polls are worth).
NZD
AUD maintains a grip on 1.08 this morning in what will be a busy week for the Kiwi data calendar. Today should trade flat, but the party kicks off with tomorrow’s Inflation Expectations and then the RBNZ is in action on Wednesday; the RBNZ is expected to cut interest rates from 1% to 0.75% which would bring it in-line with our own current cash rate.
Note: Today is of course Remembrance Day, don’t be shy with buying a Poppy or showing your support however you are able to…