Greenback Gains on Tax Bill Passage
AUD
The AUD opens lower against the majors with sentiment still frayed following economic data for global manufacturing and services sectors overnight. The Australian figures were slightly worse than previous readings, with the Flash Manufacturing PMI at 51.7 and Flash Services PMI at 50.5. The May data signaled a further expansion of business activity in the private sector, although output rose at a softer pace. New order growth also eased and business confidence waned again. The Asian equities closed down, with ASX -0.5%, Shanghai Comp -0.2% and Nikkei -0.8%. Additionally, commodities were down overall with the largest movers being Sugar -1.7%, Oil -1.2% and Gas -1.2%. No economic data is due to be released today except for Chinese Foreign Direct Investment ytd/y (tentative). The next key data piece is Wednesday 28 May, with Australia's CPI y/y (previously 2.4%).
USD
The AUDUSD opens at 0.6409, down from yesterday’s highs of 0.6458, with the USD strengthening after 3 days of losses, lifted partly by the passage of President Trump's bill for huge tax and spending cuts by the House of Representatives. Flash Manufacturing and Services PMIs both released at 52.3 (expected at 49.9 and 51.0 respectively), indicating stronger than expected business conditions. On equities, Wall Street closed slightly up, with Nasdaq +0.3%, S&P 500 +0.1% and Dow Jones flat. American Unemployment Claims released slightly lower than expected at 227K vs. 230K. Tonight will have New Home Sales (expected at 694K) and Monday morning will have Fed Chair Powell speaking. It is also a bank holiday on Monday for the US.
EUR
The AUDEUR opens at 0.5681, trading between 0.5670 and 0.5702 yesterday. The European Flash and Manufacturing PMIs were mixed; French data released slightly better than expected, German was worse than expected and the Eurozone was overall down. Eurozone output had previously seen improvements for the last 5 months, so a slight decrease was expected by markets. On equities, the DAX opened -0.5% and CAC -0.6%. It will be a quiet day today following the flurry of data released yesterday, with only German Final GDP tonight. The next key event being ECB President Lagarde speaking Monday night.
GBP
The AUDGBP opens at 0.4776, dropping from yesterday’s highs of 0.4808 despite their Flash Manufacturing PMIs falling short of expectations. The FTSE closed -0.5%. Today will have their Retail Sales m/m at 4pm, with current expectations of it releasing at 0.3%. Next week will be quiet for the GBP, with no key data pieces expected. Monday will also be a bank holiday.
NZD
The AUDNZD opens higher at 1.0866, reaching highs of 1.0885 and settling into current levels. Retail Sales q/q released much higher than expected at 8:45am at 0.8% (expected to be flat). Next Wednesday will have their RBNZ Cash Rate Decision, with market expecting a rate cut.