AUD/USD Holds onto 0.70 U.S cents
AUD
The AUD brielfy dipped below 0.70 U.S cents yesterday, touching lows of 0.6988. Weak local CPI (headline and core) released earlier in the week, lead to a raft of banks and economists calling for an RBA rate cut in just over a weeks' time. Add to that huge pressure from the USD, which opens above 98.00 in DXY terms and you have a recipe for futher AUD weakness. The USD has broken out of it's long held ranges against the Euro, GBP and other major currency crosses. With Australia and N.Z out for ANZAC day yesterday it was a quiet session from Asia, the ASX performing well, opening at 6387 this morning. Commodity prices have trimmed gains over the past week, but still provide decent support for the local unit. Gold has softened from over $1320 to $1277, weighing on the local unit however. Import Prices and PPI are released locally today, Producer Inflation unlikely to inspire much upside movement for the AUD which is pinned closed to 0.70 U.S cents. Downside risk should continue, with 0.6980 providing initial support.
USD
Watch out for the USD! The USD has finally broken out, opening above long-term resistance on the DXY at 97.70, closing above 98.00, an ominous sign for USD pairs across the globe. Having found it's mojo overnight, the USD opens significanly higher against most major and minor currency pairs, emerging markets being hammered over the past few days. USD strength materialised a few days ago, the USD index (DXY) unable to close above 97.70, that changed overnight. The question is will the USD now push on? To stocks and U.S bourses were a mixed bunch, the S&P closed flat, the Nasdaq posting fresh record highs. With the Canadian and Swiss national banks jumping on the dovish central bank wagon, the USD looks the best of a bad bunch, especially with pressure on the RBA to act on the first Tuesday of May. Weekly Jobless Claims moved higher, Continuing Claims as expected.
EUR
AUD/EUR opens marginally lower at 0.6300 today. The AUD suffered bruising after a disastrous Q1 CPI report on Wednesday, AUD reaching a low of 0.6265. The Euro has been taken apart by the USD over the past few sessions, allowing the AUD to fight back somewhat and make small gains this morning. Eurodollar has moved below key support, opening at 1.1337 this morning and susceptible to further losses, this could assist AUD/EUR higher. European equities closed lower, risk appetite limiting upside in AUD crosses. Local Export Import data and PPI are released locally today, watch out for more significant moves overnight, where currencies close the week will be vital for future direction.
GBP
Brexit headlines have calmed of late, May's Conservative party and the Labour leaders unable to find much common ground, leading many commentators to believe a swift brexit deal is off the table. European elections are now all the chatter, the Conservatives look to be taking a flogging already in opinion polls, creating uncertianty in the U.K and likely a weaker GBP. AUD however has it's own problems, the recent range being kept in tact, AUD/GBP opening at a familiar 0.5440. Today's local data shouldn't move things around too much. The RBA will be in focus a week on Tuesday, most banks now calling for a 25 basis point cut.
NZD
NZD/USD fell to 0.6578 overnight, before recovering to 0.6330 this morning. Trade Balance released this morning marginally beat expectations. The Kiwi is at the mercy of the USD at the moment, a close above reistance on the DXY an ominious sign. Kiwi opens higher againsrt the AUD this morning at 1.0582.
Today’s data
AUD:
Q1 Export and Import Index
USD:
Q1 GDP, Uni of Michigan Sentiment
NZD:
Consumer Confidence