AUD Supported by Inflation Uptick

AUD

The Aussie Dollar opens a little higher against most majors, lower against the USD, following a slight boost from domestic inflation data yesterday, with CPI at 3.0% y/y (exp. 2.9%), fueling expectations that the RBA's cutting cycle may be shallower and slower than expected. Locally, the ASX 200 closed -0.9% as financials and healthcare sectors led gains at -1.7% and -1.3%. Asian equities finished the session in the green, Hang Seng +1.5%, Shenzhen +1% and Nikkei +0.3%. Commodities overall were down with only few outliers, Copper +3.9% and Crude Oil +3.9%. Other than the CPI release it was a quiet day yesterday and the rest of the week follows with no data releases for the Aussie. Markets will be looking to next Tuesday’s rate decision from the RBA. China being much the same with no data releases yesterday or to close out the week.
 

USD

AUD/USD opens slightly down at 0.6583, as the USD strengthened as Fed Chair Powell emphasized a cautious tone on further easing for future rate decisions. Wall St. was lower again for a second straight session with the Dow -0.4%, S&P 500 -0.3% and the Nasdaq -0.3%. Yesterday’s data saw New Home Sales released up 20% from 664k to 800k a three-year high, Today and tomorrow has some major data coming out with Final GDP q/q out today expected to have no change from previous 3.3% and Friday will have the Core PCE Price Index m/m (Federal Reserve's primary inflation measure) expected down at 0.2% from previous 0.3%.
 

EUR

AUD/EUR opened up at 0.5606, holding on to the 0.56 handle following the AUD strengthening from CPI data. The DAX and CAC closed mixed at +0.2% and -0.6%. Yesterday saw German ifo Business Climate released at 87.7 missing expected of 89.3. Today will have European M3 Money Supply y/y expected down at 3.3% from Previous 3.4% and Private Loans y/y expected 2.3% from previous 2.4%.
 

GBP

AUD/GBP opens up at 0.4895. The FTSE closed up +0.3%. Overnight, MPC Member Greene spoke about supply shocks and monetary policy stating “It's appropriate that the response to the uncertainty and risks we are currently facing should involve a cautious approach to rate cuts going forward”. No data out today or tomorrow to close out the week.
 

NZD

AUD/NZD continues seeing strong growth at 1.1320, which is fresh 3-year highs for the currency pair. No data to be released for the rest of the week.