Currency Update - Thursday 28th March 2019
AUD
The dovish tilt to the RBNZ yesterday was enough for both Antipodeans to be sold off across the board, the Kiwi central bank offering nothing in their words to assuage concerns surrounding growth a key similarity of central bank statements around the world right now. With nothing on the local calendar the AUD reacted immediately and dipped against all comers barring the Kiwi, AUD/USD opens once again below the 0.71 handle, AUD/NZD capped out at 1.0450 before trimming back some of those gains to open this morning at 1.0420. Mario Draghi’s comments did little for confidence overnight, discussing the loss of growth momentum in the Zone and the uncertainty in the “global economy”. Another day devoid of key data ahead locally, AUD will move on offshore events and headlines, Brexit news remains a major driver. AUD/USD support held at 0.7070 and that key level remains, resistance at 0.71 then 0.7140/50.
USD
The big dollar was the major winner following the RBNZ yesterday, AUD/USD fell through 0.71 to retest lows at 0.7070, NZD/USD dropped like a stone, hitting two week lows of 0.6794. Data wise the US Trade Balance declined from $59.9b to $51.1b, beating expectations of $57b and providing the Greenback with another leg higher across the board. US equities, like those around the world closed in the red once more’ the DOW -0.13%, the S&P -0.46% and the Nasdaq -0.63% but in dollar index terms the USD remains buoyant with a gain of 0.13% to close at 96.92. GDP the big print tonight from the States accompanied by Personal Consumption for the fourth quarter of 2018, Core PCE and Initial/Continuing Jobless Claims. Brexit Uncertainty likely to continue to favour the USD.
EUR
The AUD fell from a high of 0.6333 yesterday to open a shade below 0.63 euro cents this morning. With no primary EU data markets were tuned into ECB President Draghi's speech. He emphasised the uncertainty in the global economy, the lack of growth in the EU economy and that the ECB has plenty of firepower to deal with another downturn. The Euro fell against the Greenback, opening at 1.1250, towards key support. European equities closed marginally in the red as risk appetite was muted. German and Spanish CPI are released this evening.
GBP
Pound volatility continues as Therea May announced that she would step down as P.M if her Withdrawal Agreement successfully passed through parliament. The Irish DUP indicated they would still vote against it however, along with an element of the Brexiteer gang. The House speaker also repeated his reticience on allowing the bill to tabled as a motion, as essentially the bill is the same as before, with no meaningful changes. That means the U.K edges closer to a no-deal Brexit/referendum/general election. The Pound is hanging in there however, expectations are for a longer delay to Brexit, or a softer exit. Realised Sales numbers printed below expectations, Consumer Confidence numbers are released later this evening. With former apponents to May's deal changing their mind of late (inclusing Mogg and Johnson), May's chances of passing her deal on Friday have improved.
NZD
A tumultuous ride for the Kiwi yesterday as the RBNZ voted to keep rates on hold and provide a more dovish statement. The RBNZ moved from a neutral rates outlook, to one which favoured the next move in interest rates being 'down'. The Kiwi instantly fell 1.2% against both the AUD and USD. The AUD opens at 1.0420, the USD up from 0.6920 to 0.6800 this morning. The RBA could follow the RBNZ's lead next Tuesday, bringing the Kiwi back to previous highs. ANZ Business Confidence is released at 11am.
Today’s data
AUD:
Feb Job Vacancies
USD:
Weekly Jobless Claims, Pending Home Sales
NZD:
March Business Confidence