AUD/USD Sees Fresh Yearly Highs

AUD

The Aussie Dollar continues to gain strength against the major currencies, as the majority of global equities and overall risk sentiment improved. On equities, the ASX closed -0.3%, Shanghai Comp +1.7% and Nikkei +1.2%. Commodities were down overall, with Natural Gas -2.3%, Crude Oil -2.2% and Coal -1.7%. Yesterday, we had MI Inflation Expectations, which released at 4.7%. No major data releases are expected for the rest of the day, however, Chinese New Loans may come out today and are predicted to be 700B. No economic news out of Australia until next Thursday’s unemployment data, although there are Chinese Retail Sales and Industrial Production figures on Monday.
 

USD

The AUD/USD reaches fresh 2025 highs of 0.6665, improving from yesterday off the back of weaker American Unemployment data last night, with markets more concerned with the sliding US labour market than the higher-than-expected CPI print. Monthly CPI was released at +0.4% (expectations were +0.3%). The Core figure, which strips out volatile food and energy prices, printed at +0.32%. Wall Street rallied overnight, with the Dow Jones +1.4%, S&P500 +0.9% and NASDAQ +0.7%. Tonight will see Prelim UoM Consumer Sentiment and Prelim UoM Inflation Expectations, which markets value as an indicator of American economic health. Markets fully expect a rate cut out of the US Federal Reserve next Thursday, with the current predictions between a 25 or 50 basis point cut. Tuesday will see US Retails Sales before the US Federal Reserve Decision.
 

EUR

The AUD/EUR reaches 0.5677, hitting 3-month highs primarily due to improved global risk sentiment in the market. European equities mirrored this view, with the DAX closing +0.3% and CAC +0.8%. Overnight, we had the European Main Refinancing Rate, which held their interest rates. In their accompanying press conference, they mentioned that they were happy with the current level of risk to European economic growth, while waiting for clarity on the effect of US tariffs. No major economic data out of the Eurozone today, with not much next week either.
 

GBP

The AUD/GBP opens at 0.4907, reaching 6-month highs today thanks to the strengthening of the AUD. The FTSE also closed 0.8%. This week has been quiet for the English economic data, with only the RICS House Price Balance releasing below expectations. Today will have GDP data at 4pm, expected to release at 0%. The next data piece will be on Tuesday, with wage and employment data.
 

NZD

The AUD/NZD opens at 1.1149, touching 7-month highs of 1.1158. Today saw BusinessNZ Manufacturing Index release at 49.9 (slight decrease in factory activity). No other news today, with FPI m/m releasing on Tuesday (previously 0.7%).