Currency Update - Tuesday 28th May 2019
AUD
The AUD opens off it's recent high this morning at 0.6919. Yesterday was a non event for data across the globe and here in Australia. The USD was marginally firmer, AUD reaching a high of 0.6940, before giving up some of those gains. U.S/China trade war headlines will affect the AUD this week, as well as local GDP partials released locally tomorrow and Thursday. U.S economic data of note is released on Friday this week, setting up a potentially tight trading range for AUD/USD until the week closes. Friday's Chinese PMI has the potential to get the Aussie moving however. Stocks remain elevated, but with the U.S and most of Europe out for holiday's overnight, movement was contained for the most part. 0.6940 forms resistance for the AUD this week, 0.6860 forms support.
USD
The USD was marginally firmer overnight, the U.S were out for a Memorial Day holiday, leaving currencies and other asset classes trading in a tight range. Trump initially announced that the U.S were not ready to do a deal with China, before later saying that a deal with both China and Japan will be done in July. The major U.S economic data of the week is released on Thursday and Friday, Preliminary GDP and PCE Defaltor data the highlights.
EUR
Most of the EU were away for holidays yesterday, the main news overnight coming from the EU stating that they could soon launch penalties against Italy for their excessive 2018 debt levels. The penalty being considered is around the $4bn. The Euro slid on the back of the announcement, as fear over Italy's future budget considerations grow. Eurodollar softened, AUD/EUR opens at a familiar 0.6180. European stocks rallied around 0.5%. GDP and CPI data for some of Europe's largest economies are released mid-week this week. Consumer Confidence figures for Germany, France and the EU are released this evening.
GBP
Nigel Farage's Brexit party gained 36% of the U.K's European election votes, dismantling both the Conservative and Labour parties. The Pound is weaker against the USD at 1.2670, and opens towards the top of a one month range against the AUD at 0.5454. The U.K was closed for a public holiday so no data to report this morning. Meaningful U.K data is light on the ground this week, Brexit headlines and the fallout from EU elections will be the focus point. The Pound looks set to weaken further in the current climate of political uncertainty and with a new Tory leadership race to be run over the coming months'.
NZD
RBNZ Governor Orr speaks tomorrow morning, along with the release of ANZ's Business Confidence and The Financial Stability Report. AUD/NZD has been stable of late, opening at a familiar 1.0569. The Kiwi will react to risk flows and USD movements, NZD/USD at 0.6545 this morning.
Today’s data
USD:
Consumer Confidence, FED Manufacturing
EUR:
Consumer Confidence (Germany, France, EU)