AUD Strengthens as US-EU Standoff Triggers Selloff

AUD

The Aussie Dollar opens mixed this morning after what was a quiet day for local data with geopolitical risks being the focus of markets for now. Asian equities finished lower again on Tuesday, led by the Nikkei, -1.1% as JGBs remained offered, with the Kospi, -0.4%, Shenzhen, -0.3%, and Hang Seng, -0.3%, in tow. The ASX slid -0.7% led by losses in miners and financials. Locally, later this morning we will see the release of MI Leading Index m/m, however all eyes will be focused on tomorrow’s employment data at 11:30am with Employment Change figures which are forecasted to increase 28.3k, and Unemployment Rate which is expected to increase from 4.3% to 4.4%. 
 

USD

AUDUSD opens higher this morning at 0.6736 after the US dollar headed for its largest daily fall in over a month on Tuesday, after continued threats from the White House to Europe over the future of Greenland triggered a broad selloff across U.S. stocks and government bonds. US equities also took a hit closing in the red with the Dow Jones -1.7%, S&P 500 -1.8%, and the Nasdaq -2.1%. Overnight in the US, President Trump will be speaking at the World Economic Forum’s annual meeting which will capture the attention of investors as they continue to monitor the unfolding tariff tensions between the U.S and Europe where sentiment is expected to remain weak given there is no end in sight.
 

EUR

AUDEUR opens lower this morning at 0.5742 after US and European tensions continued driving Investors to dump US Dollar assets on fears of prolonged uncertainty driving up the EUR. With risk sentiment remaining weak, Eurozone equities also closed in the red with the DAX -1.0%, and the CAC -0.6%. Looking at Eurozone news, later this evening at 6:30pm ECB President Lagarde will be speaking however all focus will be on the Manufacturing PMI’s set for this Friday.
 

GBP

AUDGBP opens slightly higher this morning at 0.5008 after yesterday’s UK Claimant Count Change came through worse than forecasted at 17.9K claims from 15.6K. BOE’s Bailey also spoke, stating that the level of geopolitical uncertainty is a big consideration for BOE on financial stability. UK equities also closed in the red with the FTSE -0.7%. Later this evening at 6pm we will get the release of the UK’s CPI y/y which is expected to slightly increase from 3.2% to 3.3%.
 

NZD

AUDNZD continues its downward trend opening lower this morning at 1.1548. Nothing set for release today, for the rest of the week we have Visitor Arrivals m/m tomorrow and the NZD CPI q/q will be released at 8:45am on Friday with forecasts pointing to a drop from 1% to 0.4%.