Aussie Dollar Climbs on US-Iran Diplomacy Hopes

AUD

The Aussie Dollar sees a lift against the greenback but opens largely flat against the rest of the majors as hopes of a diplomatic breakthrough between the US and Iran improve market sentiment. Asian equities ended lower yesterday with the Nikkei and Hang Seng both -1.3% and the Shenzhen -.5%. Locally, the ASX 200 closed -.3% as energy and materials sectors led losses of -1.3% and -1.2% respectively. No data was released locally yesterday, however across Asia the Chinese central bank kept the 1-y Loan Prime Rate unchanged at 3.00% and the 5-y Loan Prime Rate steady at 3.50%, which was in line with expectations. This morning, RBA Deputy Gov Hauser spoke at a fireside chat in Sydney, noting that the RBA were "ahead of the curve" by increasing rates before other developed economy central banks and that some further easing in the jobs market may be required for inflation to fall sustainably back below 3%.

USD

AUDUSD regains the 0.7 handle this morning, opening at a rate of 0.7009 after reports that Washington and Tehran have given preliminary approval to a compromise proposal presented by Pakistan. Wall St. traded firmly with the Dow Jones closing +.9%, the S&P 500 +.3% and the Nasdaq +.1%. U.S. 10-year yields fell 3bps to 5.20%, while Brent Crude fell slightly to $109 a barrel. Some minor data out overnight for the US as Housing Starts fell to 1.22M (exp 1.3M) from a previous 1.29M and and Pending Home Sales came in at -7.3% (exp -0.6%) from a previous +0.3%. The rest of the week is looking bare data-wise for the US, with all eyes on next Thursday's rate decision from the Fed.

EUR

AUDEUR opens slightly higher at a rate of 0.6234 as hawkish commentary from the RBA boosts the Aussie Dollar. European equities closed lower with the DAX and CAC coming in at -0.1% and -0.4% respectively. Yesterday the German ZEW Survey Expectations released at 28.1 (Est. 30.0) and the ZEW Survey Current Situation came in at -35.9 (est -44.5). No major releases ahead for the Eurozone until Friday when we will see the Flash Manufacturing & Services PMI data released.

GBP

AUDGBP opens flat at a rate of 0.5234 following some mixed employment data released yesterday evening. UK equities closed slightly lower with the FTSE coming in at -0.3%. The UK Unemployment Rate eased to 4.7% after it was expected to remain at 4.9%, Claimant Count Change printed at 30.3k (est 19.4k) from a previous 7.0k and the Average Earnings Index 3m/y dropped to 3.7% (exp 3.8%) from a previous 3.9%. Some more key data expected for the UK later this evening with CPI y/y expected to increase to 3.4% from a previous 3.1%.

NZD

AUDNZD opens flat at a rate of 1.2318 this morning. Early this morning, the GDT Price Index release at 2.5% from a previous 1.2%. Credit Card Spending y/y out later this afternoon, while the main focus for the Kiwi will be tomorrows CPI q/q release.