Greenback Falls on Dovish Fed Comments

AUD

The Aussie Dollar experiences ongoing weakness against major currencies after the Middle East conflict escalation over the weekend. A small recovery was seen just after 8am AEST this morning, when U.S. President Trump announced Israel and Iran have agreed to a 'complete and total' ceasefire. Israel and Iran are yet to comment. A mixed day for Asian equities yesterday saw the Hang Seng trade +0.7%, Shenzhen +0.3% and Nikkei -0.1%. Locally the ASX shed -0.4%, with materials and industrials leading losses at -1.3% and -1.4%. Commodities were mixed, mostly overshadowed by crude oil loosing 8.9% yesterday. No data for the Aussie today. AUD CPI y/y out tomorrow at 11:30am, expected to remain the same at 2.4%.
 

USD

AUDUSD recovers from overnight crash to open stronger at 0.6483 after dovish Fed comments weakened the USD. Federal Reserve policy maker Bowman said the U.S. central bank should consider interest rate cuts soon. She noted the time to cut rates may be fast approaching, with concerns about risks to the job market and less concerns that tariffs will cause an inflation problem. U.S. equities closed higher overnight following a “scripted” military response from Iran. On Wall St., the Nasdaq, and the S&P 500 both gained 1%, while the Dow Jones gained .9%. Flash Manufacturing and Flash Services PMIs were positive, yet missed expectations, at 51.1 and 52.9, expected at 52.0 and 53.7 respectively. This morning, US Home sales just posted their slowest May in 16 years. Overnight, we'll see Fed Chair Powell Testify, CB Consumer Confidence and the Richmond Manufacturing Index.
 

EUR

AUDEUR loses the 56 handle to open at 0.5588, with the Euro strengthening after markets buy up safe haven currencies. Eurozone equities closed Monday in the red with DAX down 0.3% and the CAC down 0.7%. Yesterday evening, we saw, French, German and Eurozone Flash Services and Manufacturing data come out mixed with French data underperforming and German overperforming. Today, German ifo Business Climate, expected at 88.2, previously at 87.5. Spanish Flash CPI y/y out Friday.
 

GBP

AUDGBP opens weaker despite recovering from overnight lows to open at 0.4781. The FTSE closed down -0.2%. Flash Services and Manufacturing PMIs out yesterday evening, manufacturing stronger at 47.7, expected at 46.9 and Services stronger too, 53.1 expected at 52.9. Bank of England Governor Bailey speaks this evening.
 

NZD

AUDNZDopens flat at 1.0807 off the back of little economic data from both sides this week so far. Credit Card Spending y/y out this morning. Trade Balance data out tomorrow morning. A quiet week for the Kiwis otherwise.