Currency Update - Thursday 27th June 2019
AUD
The AUD climbed a little higher overnight, peaking at 0.6994 and opening a shade lower this morning. Market confidence came from a Mnuchin comment, expressing his view that the U.S and China are '90% of the way there (with a deal)'. There's nothing like some god old jawboning to get markets going! We've heard this all before, markets reacted mildly, the AUD's risk based status helping it along to higher levels. There was no local data to report yesterday, AUD trading in a tight range. The AUD opens marginally lower at 6625. Oil prices rallied once more, commodities such as iron ore price supportive of the local unit. U.S data was again a little weaker than expected. Support remains at 0.6925, resistance now at 0.7000/20. AUD to react to U.S data results before further position squaring ahead of this weekends' G20 action.
USD
The USD was generally flat overnight. Trump was on Fox News announcing his belief that it is possible to reach a trade deal with China and that further tariffs could be avoided. Trump showed his displeasure at the Fed's Powell, saying that he had the power to fire him. To the data and Durable Goods fell by -1.3% (-0.3% exp), Wholesale Inventories were marginally weaker. Mnuchin meanwhile tried to jawbone markets with a comment that the trade deal was 90% complete. Markets weren't buying it, the familiar comments finding diminishing returns amongst market participants, stocks offered for the most part. This evening sees the release of Q1 GDP and weekly jobless claims.
EUR
French Consumer Confidence came in at 101 (100 exp), sentiment now positive for the first time in over a year, stocks opened well, but lost ground into the close. It looks like traders and investors alike are treading water before this weekend’s G20 summit, where we should get a better understanding of the U.S/China relationship. Eurodollar closed marginally lower, AUD making small gains against the single currency. June CPI for Germany and Spain and Consumer Confidence for the EU are released this evening.
GBP
The Pound opens mildly lower against the USD and AUD this morning, AUD managing to reclaim the 0.55 handle. Again, markets are in wait and see mode before this weekends' G20 summit. With no U.K data to report the Pound traded in a tight range. Current Account & Final GDP q/q figures released Friday will be in focus before markets react to Trump/Xi at the G20 Summit.
NZD
The RBNZ left interest rates on hold yesterday, an August rate cut pricing at 70%, despite this the NZD put in a short squeeze, opening higher against both the AUD and USD this morning, NZD/USD at 0.6680. The RBNZ are set to monitor global events/data before making a decision as to whether to cut rates further. June Business Confidence released later this morning.
Today’s data
USD:
Weekly Jobless Claims, Q1 GDP
EUR:
June CPI (Spain, Germany), June Consumer Confidence (EU)