Aussie Dollar Flat Ahead of RBA Rate Decision

AUD

The Aussie Dollar opens flat against the majors this morning as the RBA’s rate decision draws near. A positive start to the week in Asian equities saw the Hang Seng gain +0.9%, Shenzhen +0.3%, while the Nikkei ceased trade today as Japan enjoyed their ‘Culture Day’ public holiday. Locally, the ASX 200 finished with modest gains of +0.15%, as technology and financial sectors led the pack at +1.65% and 1.25%. The RBA’s rate decision will be at 2:30PM today, and they are expected to hold, following on from the latest inflation data. A prudent tone from the central bank appears largely on the cards, which could in turn underpin a recovery in AUD. Looking ahead, the calendar runs dry in terms of Aussie economic data until next Thursday when the Unemployment Rate will be released.
 

USD

AUDUSD opens slightly down at 0.6538, on the back of an increase in USD strength post Fed rate cut and uncertainty of the length of the US government shutdown which is weighing on broader risk sentiment. Wall Street was mixed to start the week with the Dow -0.4%, S&P 500 +0.2% and the Nasdaq +0.5% heading into the last hour of trade. Early this morning, the US ISM Manufacturing PMI came in below expectations at 48.7, which indicates that the US industrial sector remains under pressure from weak growth and tariff-related uncertainty. No official data is set to be released this week in the absence of hard data during the government shutdown. The US is forced to rely on the private sector for insights into their economy with ADP Non-Farm Employment Change and ISM Services PMI to be released early Thursday morning.
 

EUR

AUDEUR opens flat at 0.5676 after trading at an overnight high of 0.5693. The DAX and CAC closed +0.7% and -0.1% respectively. Overnight the Eurozone had Final Manufacturing PMI which showed manufacturing output across the euro area expanded again in October, stretching the current run of expansion into an eighth month, although the rate of the growth is rather mild. Today ECB President Lagarde speaks at the Bulgarian National Bank about the Eurozone.
 

GBP

AUDGBP opens slightly down at 0.4978 this morning, trading in a range of 0.4964/0.4995 overnight. The FTSE closed at -0.2%. Overnight the UK Final Manufacturing PMI came in slightly above forecasts at 49.7, which showed manufacturing output in the UK expanded for the first time in a year during October. Tomorrow, we have UK Final Services PMI and on Thursday we have the BOE Official Bank Rate decision which is expected to hold at 4.00%.
 

NZD

AUDNZD opened at a three year high of 1.453 this morning. Tomorrow will be crucial for NZ as their Unemployment Rate is set to be released, which is currently on a string of negative results.