Greenback Buoyed by US-UK Trade Deal

AUD

The AUD opens mixed across all the major currencies following recent interest rate decisions in the UK (cut) and US (hold). Asian equities were upbeat on Thursday with the Shenzhen trading +0.6%, and the Hang Seng & Nikkei +0.4%. The ASX gained +0.2% as utilities and industrials outperformed. Commodities were mixed overall, Crude oil, Gas, and Sugar being the biggest movers at +3.4%, +2.1% and +2.2% respectively. A quiet end to the week in Asia and Aus, CPI and PPI y/y out of China tomorrow. No scheduled data out for the Aussie until early next week, where we'll see business and consumer confidence reports.
 

USD

AUDUSD falls further from Wednesday's 0.6514 highs, opening at 0.6396 with the USD strengthening after market nerves were soothed by a bilateral trade deal between the US and the UK. Trump announced a 'breakthrough' trade agreement which leaves in place a baseline 10% tariff on British imports including vehicles. The market sees the trade deal as positive because it means Trump may be envisioning a 10% baseline for friendly countries, with anything beyond that subject to negotiation. Wall St. closed higher overnight with the Nasdaq trading +1.1%, the S&P 500 +.7%, and the Dow Jones +.6%. Yesterday, we saw the FED hold rates at 4.5%, as expected, noting increased economic uncertainty and an increased risk of both inflation and job cuts. We also saw Unemployment Claims come in at 228K, expected at 231K. Voting FOMC Member Waller will be speaking overnight.
 

EUR

AUDEUR opens relatively flat at 0.5698. The DAX closed +1.0% higher and the CAC closed +0.9%. A quiet day yesterday out of Europe with a French bank holiday as well. Italian Industrial Production m/m out expected at 0.4%, previously at -0.9%. Eurogroup Meetings will be held overnight. The Eurogroup coordinates economic policies of the 19-euro area member states, and their initiatives and decisions can have a widespread effect on the Eurozone's economic health.
 

GBP

AUDGBP opens flat at 0.4830 off the back of the expected 25-basis point rate cut from the Bank of England. The BOE has cut interest rates from 4.5% to 4.25%, citing Donald Trump's trade war as one of the key reasons for the reduction in borrowing costs. Following the decision BOE Gov Bailey is due to speak this evening at Reykjavík Economic Conference.
 

NZD

AUDNZD opens stronger at 1.0835 from yesterday. No Kiwi data was released yesterday, nor will there be any today. The next piece will be on Wednesday: Visitor Arrivals m/m.