Currency Update - Wednesday 27th March 2019

AUD

The AUD rallied in-line with risk assets overnight, most major equity markets closing in the black.  With no local data to report, it was a quiet session for the AUD.  It was a steady grind higher from 0.7085 to an overnight high of 0.7148, AUD settling at 0.7132 this morning.  0.7165 is the recent high, AUD needs to push through this level if it's to push on to 0.72 U.S cents.  Commodities are well bid, oil higher again overnight, gold continues to impress, copper and silver holding their own.  The highlight today will be the RBNZ rate decision, no change to rates are expected, this in turn could help the AUD stabalise.  Risk events such as the Trump/Xi deal and Brexit continue to hang over markets, any resolution here could add further bid tones to the AUD. We have Chinese data today, a risk event for the AUD considering China is slowing.  0.7150 held overnight, resistance then comes in at 0.7180, support at 0.7100. 

USD

Housing Starts fell by 8.7% despite ultra loose interest rate settings in the U.S, Building Permits were also weaker down 1.6% (0.9% exp). U.S House Prices rose 0.6% in January (0.4% gain expected).  Meanwhile Consumer Confidence fell below expectations in March.  A mixed bag of results sees the USD marginally higher higher this morning.  U.S equities rose, the S&P up close to 1%.  The USD index is stuck in a big old range, Eurodollar closing at 1.1270, unable to break below support at 1.1180.  January Trade Balance is out this evening, otherwise it is a quiet 24 hours for U.S data.  Volatility is expected to be light unless there is further progression with the U.S/China trade deal.    

EUR

Economic data was thin on the ground being the last week of the month.  German Consumer Climate printed marginally behind expectations, for the most part however there was nothing juicy to get our teeth into on the data front.  The Euro is rangebound, opening at the lower end of the range against a stronger USD.  AUD/EUR is at a familiar 0.6328 this morning and with no local stimulus the range is expected again to be tight.  The CAC closed 0.9% higher, the DAX was up 0.6%.  French and Italian Consumer Confidence are released this morning, the ECB's President Draghi and Praet speak this evening. 

GBP

More fun and games with Brexit overnight, as politicians prepare to cast their indicative Brexit votes this evening, so the government can try and better read the mood of the house. Meanwhile U.K Mortgage Approvals fell to their lowest level in 6 years. Brexiteer Rees- Mogg said that the choice for Brexit seems to be between either the P.M's deal or a no deal Brexit.  Some of the more hardline Brexit members seemed to soften their stance however, allowing GBP to strengthen.  With days left to go traders are getting twitchy, the clock well and truly running down.  With no U.K data this evening, movements in the Pound will be headline driven. 

NZD

Today sees an RBNZ rate decision.  No change to monetary settings are expected, this in itself could give the NZD a temporary boost.  Investors will be keenly waiting for the statement and tone of the meeting. 

Today’s data

USD:

  • Trade Balance

EUR:

  • FR & IT Consumer Confidence, Draghi, Praet speak in Frankfurt

NZD:

  • RBNZ Rate Decision

CNY:

Feb Industrial Profits

FX Corp