EUR Continues to Steal USD Safe Haven Strength

AUD

AUD opens mixed among the majors following a rather quiet week of local data, during which the major driver for AUD was ongoing trade talks between US and China and geopolitical risk. Asian equities gave back some gains on Thursday with Hang Seng down -1.4%, the Nikkei -0.7% and Shenzhen -0.1%. Locally the ASX shed -0.3% with materials and financials leading losses at -1.0% and -0.5%. Commodities were mixed; Wheat down -1.4% and Coal up 1.0%. Today's local data comes from China,  with New Loans out expected at 890B up from previous 280B. 

USD

AUDUSD opens slightly up at 0.6532, continuing to test the recent resistance level as weaker than expected US inflation data was released over night. Another solid session on Wall St. saw the S&P 500 close +0.3%, while the Dow Jones and the Nasdaq both closed +0.2%. US producers reported PPI for May was soft at +0.1% M/M against expectations of 0.2% while the Y/Y result matched forecasts at 2.6% though all core measures failed to meet expectations. Also released overnight U.S. weekly jobless claims data was soft with initial claims coming in at 248k from forecasted 242k. Following the weak US inflation data over the past couple days markets have now fully priced in a 25-basis point rate cut by the Fed in September and December. Overnight we will see Prelim UoM Consumer Sentiment expected at 53.5 up from previous 52.2 and Prelim UoM Inflation Expectations coming in previous at 6.6%.
 

EUR

AUDEUR opens down at 0.5636, the Single-Currency accumulating strength through safe-haven investors switching out of the USD (EURUSD is at 3 1/2 year highs at 1.16), a result of the perception of the Trump administration seemingly wanting to decouple US markets from international trade, reducing its appeal as the "global currency". European Equities closed down with the DAX -0.7 and the CAC -0.1. Following a relatively quiet week for the Eurozone we will see Industrial Production M/M forecasted at -1.6% down from previous 2.6% and Trade Balance forecasted at 18.2B down from previous 27.9B. Nothing released over the weekend.
 

GBP

AUDGBP opens flat at 0.4797, towards the lower end of the week's range, the FTSE closed up 0.2%. Rather quiet week for the Pound with the major data point being GDP m/m yesterday missing expectations of -0.1% coming in lower at -0.3% showing a disappointing retraction in the British economy after a 0.2% expansion from the previous month. Goods Trade Balance followed at -23.2B down from previous -19.9B and both Industrial and Manufacturing Production m/m missing expectations down at -0.6% and -0.9%.

NZD

AUDNZD opened slightly lower at 1.0764 in what is becoming a familiar story with either side of the pair failing to gain the ascendancy. This morning saw BusinessNZ Manufacturing Index released at 47.5 down from previous 53.