Aussie Dollar Outpaces G10 Currencies
AUD
The Aussie Dollar opens slightly higher against the major currencies, as commodity prices surged this week due to inflationary pressures, green energy demand and supply shortages. Yesterday, the largest movers were Copper +4.5%, Natural Gas +3.9% and Crude Oil +3.2%. Asian equities were mostly flat, with the ASX -0.1%, Shanghai Comp +0.3% and Nikkei +- 0%. No major economic news out of Australia, however the Import Prices q/q printed at 0.9% vs. expectations of -0.2%. Some minor economic data will be released today with PPI q/q (forecasted at +1.1%) and Private Sector Credit m/m (forecasted at +0.6%). China also has their Manufacturing PMIs over the weekend, expecting to release at 50.1. However, all eyes are on the RBA’s rate decision on Tuesday with markets expecting a 67% chance to increase Australia’s Cash Rate.
USD
The AUDUSD opens slightly higher at 0.7051, reaching fresh 3-year highs of 0.7094 before retracing to 0.6970 and settling to current levels. Choppy conditions in financial markets continued overnight and saw the Nasdaq trading -1.4%, the S&P 500 -.6%, and the Dow Jones -.2% entering the final hours of trade. Gold peaked just shy of $5600 before retreating to $5300, while copper rose 4% spurred by some stimulatory headlines out of China. Overnight initial US Jobless Claims for January printed higher than market expectations at 209k (Est. 205k), while Continuing Claims came in lower at 1,827k (Est. 1,850k). The U.S. trade balance for November printed at -$56.8bn (Est. -$44bn), while November imports were at +5.0% m/m (Est. +2.3%) and exports of -3.6% m/m (Est. -1.7%). Tonight will have Core PPI m/m and PPI m/m with expectations of 0.2% each.
EUR
The AUDEUR opens flat at 0.5890, trading between 0.5850 and 0.5918 with the peak being new 10-month highs. It was a quiet news day from the Eurozone yesterday, however equities took a dip overnight with the DAX -2.1% and CAC +0.1%. Today will have German Prelim CPI m/m (expected flat) and German Prelim GDP q/q (expected +0.2%). Next Thursday night will see the ECB Interest Rate Decision.
GBP
The AUDGBP opens slightly higher at 0.5106, hitting fresh 15-month highs of 0.5125 last night before retracing to current levels. It’s been quiet out of England this week, with the FTSE only closing slightly higher at +0.2%. No news until next Thursday night with the BOE’s Interest Rate Decision; a majority of the volatility will be from the Aussie Dollar.
NZD
The AUDNZD opens slightly lower at 1.1602. Yesterday has Kiwi Trade Balance at 52M vs. expectations of 30M and ANZ Business Confidence dropped from 73.6 to 64.1. No data until Tuesday’s Building Approvals m/m.