Aussie Dollar Rebounds Amid Tech Stock Sell-Off

AUD

The Aussie Dollar opens slightly higher against the major currencies amid the aftermath of another tech stock sell off that has weakened the greenback. Asian equities finished higher on Friday with the Nikkei +1.4%, Hang Seng +.5% and the Shenzhen +.1%. Locally, the ASX 200 closed +1% as technology and materials sectors led gains of +5.6% and +3.2% respectively.  No economic data out of Australia on Friday or on the weekend, however China will release 3Q GDP and September activity data today. GDP q/y is expected to release at 4.4% (prev 4.3%), Retail Sales y/y are expected to increases lightly to 0.5% (prev 0.4%) and the Unemployment Rate is set to remain steady at 5.3%. The economic calendar is looking bare this week for Australia with no major releases expected.

USD

AUDUSD opens higher at 0.6970, as the US Dollar saw weakness over the weekend due to shifting market sentiment that the chance of an interest rate hike has lowered. On Friday, Kevin Warsh spoke in Bangkok at an annual meeting for the IMF. Markets interpreted his speech as dovish due to his remarks that inflation was not as much a concern compared to the rest of the world. Wall Street continues its losing streak over the weekend, with the Dow Jones -0.3%, S&P 500 -1.2% and Nasdaq -2.1%. No major events out of America this week as the US Federal reserve members have their silence period before their interest rate decision on October 29.

EUR

AUDEUR opens higher at 0.6203, as the Euro continues to weaken due to French economic and political instability. The pair briefly touched 0.6232 before gapping back down to current levels. France is currently attempting to balance their budget for the first time since the 1970s, however markets are skeptical that this will occur. European equities rallied over the weekend, with the DAX +0.9% and CAC +0.3%. Last Friday evening, Eurozone September CPI printed in line with market expectations at +0.6% m/m and +3.8% y/y. No major economic data out of the Eurozone until Friday night, with Flash Manufacturing and Services PMIs due to be released.

GBP

AUDGBP opens slightly higher at 0.5224 this morning. English equities also saw an improvement over the weekend, with the FTSE closing +0.4%. Last Friday, Bank of England Governor Bailey spoke in Bangkok at an annual meeting for the IMF. He mentioned that it was too early to consider further interest rate changes. No economic data today out of England, however tomorrow evening will have employment data, with markets expecting their Average Earning Index 3m/y to release at +3.8%.

NZD

AUDNZD opens flat at 1.2310, with no major economic data out of Australia and New Zealand over the weekend. The currency pair is currently 0.3% off 6-week lows of 1.2275, as the AUD fell due to poor employment figures on Thursday. This morning had their Trade Balance figures release much lower than expected, at -1971M vs expectations of -775M. The next major piece of economic data out of New Zealand will be their CPI q/q (exp. +0.8%) on Thursday 8:45am.