Aussie Dollar Resumes Gains
AUD
Improved sentiment sees the Aussie Dollar resume recent gains, opening the day higher against the all the majors, fueled by lower PPI out of the USD, seeing commodities opening all higher too, with Crude Oil up 1.8%, Nat Gas up 0.4%, Gold and Silver flat, Iron Ore up 0.1% and Copper up 0.8%. Asian equities finished the day in the green, with the ASX up 0.3% and SHANGHAI COMP 0.1%. Yesterday saw Chinese CPI and PPI y/y released, seeing the PPI come in as expected at -2.9% from -3.6% and the CPI came in at -0.4% from 0.0%. This is showing that a lot of the industrial price wars seen in China are starting to ease, with some economists saying that an improving inflation outlook from here should mean the PBOC is close to the end of its easing cycle. Today will see the MI Inflation Expectations set to be released, previously at 3.9%.
USD
The AUD/USD continued to push higher, seeing the pair push into a 10-month high of 0.6635 overnight, fueled by soft PPI data release, opening this morning at a rate of 0.6619. Wall Street was mixed into the close, with the DOW JONES finishing up down 0.5%, S&P 500 up 0.3% and the NASDAQ was flat. U.S. PPI for August was released last night, with the results softer than expected. Headline PPI was -0.1% MoM compared to forecasts of +0.3% while it was +2.6% YoY compared to forecasts of +3.3% with core measures also generally much weaker than expected. The tame reading will only feed market expectations of a Federal Reserve rate cut next week, despite the tame inflation and near certainty of a rate cut, market reaction was muted. Tonight sees CPI set to be released, with both m/m and Core m/m reading expecting into come in at 0.3% and the y/y figure to rise from 2.9% from 2.7%; a surprise downturn could louden voices calling for a 50bps cut next week.
EUR
The AUD/EUR continued its push higher, hitting another monthly high of 0.5659 overnight, opening this morning at a rate of 0.5655. European equities came in mixed, with the DAX down 0.4% and the CAC up 0.2%. It was a quiet night last night, with French Industrial production m/m came in slightly higher at -1.1%, expected at -1.4%, previously at 3.7%. Tonight will see the European Central Bank Main Refinancing Rate set to be released, expected to remain at 2.15%. The Monetary Policy Statement and ECB Press Conference to be released after is where any potential volatility will be seen. With the ECB being very firm about their decisions so far, any uncertainty could see some potential movement.
GBP
The AUD/GBP pushes into a 2-month high overnight, flirting with the 0.49 barrier, opening this morning at 0.4889. British Equities came in soft, with the FTSE finishing down 0.2%. Yesterday saw no news released, with today seeing their GDP m/m come out at 4pm today. It’s expected to drop from 0.4% from 0.0%, showing the weakness of the British economy and the issues it’s having trying to spark growth.
NZD
The AUD/NZD sees small gains yesterday, with the pair creeping up to a weekly high, opening this morning at a rate of 1.1132. At 9:15am saw RBNZ Gov Hawkesby Speaking, mentioning the speed of New Zealand’s economic recovery will be the key factor influencing the future path of the official cash rate. There is no further data set to be released today.