Currency Update - Thursday 4th July 2019
AUD
The AUD opens higher against its counterparts this morning and at a two month high against the USD. AUD also opens higher against its crosses, AUD/GBP approaching 0.56. The rally started yesterday with much better than expected Building Approvals and Trade balance data, AIG Services Index also higher. Commodities punched higher providing further support. U.S data was mixed, the USD broadly offered overnight. Retail Sales is the focal point for data today, released at 11:30am. Markets are expecting a slightly weaker than expected result, which could send AUD back towards 0.70 U.S cents. With the U.S now out for holidays' it could be a quieter end to the week, AUD in a good position to grind higher especially if today's data surprises to the upside. Trade relations between the world two largest economies seems to have improved with further tariffs being scratched in a hope of finding common ground. Resistance can be found at 0.7040 and 0.7100.
USD
Job cuts in the U.S are increasing data showed last night, a 10 year high. ADP employment printed 40k below expectations, whilst the U.S trade deficit widened to a 5 month high in May. Market Services PMI for June was revised up , bringing up composite PMI for May also. ISM Non-Manufacturing fell below expectations, Durable Goods printed as expected, Factory Orders were marginally better than expected but still in contraction. Trump was on twitter again accusing Europe and China of currency manipulation. Equities continue to rally with the promise of free month from the Fed, Wall Street closing 0.7% higher and with fresh highs for 2019. The U.S will be closed now for the July 4th holidays so no USD delivery today.
EUR
Eurozone Services PMI's printed far better than Manufacturing PMI's overnight, French, German and Italian results all higher than expected, which was enough to see the Euro rally against its U.S counterpart. European stocks closed with solid gains as markets expected further monetary accommodation by global central banks. Retail Sales are released this evening, meanwhile AUD vaulted 0.62 cents overnight to open at 0.6231 this morning. AUD has been helped by stronger commodity prices and a return to risk appetite.
GBP
AUD/GBP rallied to 0.5589 as markets U.K Services PMI fell to 50.2 (51 exp). This caps a month of terrible data from the U.K, the economy struggling with the preparation companies have made over Brexit. This morning is a fresh 5 month high for the AUD. With no data released this evening markets will await Friday's NFP data from the U.S, ADP employment released overnight was again weak potentially setting up a weak payrolls number on Friday.
NZD
The Kiwi opens at a 2 month high versus the USD this morning despite the USD index remaining a shade below 97.00. Most currencies made ground up against the USD overnight and with holiday's over the weekend in the States the rally could continue into early next week. No local data released from N.Z today.
Today’s data
AUD:
Retail Sales
USD:
Independence Day Weekend
EUR:
Retail Sales, Lagarde Speaks