Aussie Dollar Steadies as Greenback Weakens

AUD

Weak consumer confidence drags the Aussie dollar against the majors this morning as inflation fears settle in. Asian equities were stronger yesterday with the Nikkei and Hang Seng both +1% and the Shenzhen +.3%. Locally the ASX 200 closed +.6% as real estate and materials sectors outperformed at +1.1% and +.9% respectively. Yesterday, the Westpac Consumer Sentiment survey released at -4.7% from a previous -5.2%. There were signs that the Australian job market is holding up as ANZ Job Advertisements m/m lifted 2.2% in September, from 2.6% - to be up 12.9% over the year. There is no news out for today, with China’s National day’s holiday finalising today. MI Inflation Expectations out tomorrow.

USD

AUDUSD opens slightly higher, with the pair keeping below the 0.70 barrier, opening this morning at a rate of 0.6981. U.S. equity markets have shrugged off the recent volatility and pushed to all-time highs overnight. On Wall St., the S&P 500 closed +0.6%, the Nasdaq +0.5%, and the Dow Jones +0.4%. The U.S. trade deficit for August widened to $105.6 bio, out from $92.2 bio and wider than expectations of $102.1 bio. In the U.S. tonight, minutes from the latest FOMC meeting will be released and may provide deeper insight into the Committee’s decision to raise interest rates by 25 bps in September. The release could also shed light on the Committee’s assessment of outlook, as well as the discussion behind the updated Summary of Economic Projections, which revealed a more hawkish dot plot.

EUR

AUDEUR opens the day lower, with the pair slipping from a 22 month high to drop back below the 0.62 handle, opening this morning at a rate of 0.6198. European equities finished in the green, with the DAX up +0.8% and the CAC up +0.4%. The Euro's slump has been caused by growing concern that France’s debt position could threaten the stability of the wider single currency bloc. With French industrial Production m/m dropping to -0.3%, expected at 0.2% and their Gov Budget Balance deepening to -159.6b from -145.9b. Tonight will see German industrial Production m/m, expected to lift from -1.1% to 0.5%. 

GBP

AUDGBP softened yesterday, with the pair slipping down to this morning’s open of 0.5260. British Equities finished the day higher, with the FTSE finishing up +0.4%. Construction PMI’s came out yesterday at 52.1, expected to remain at 51.7. Today is quiet news-wise with all eyes on BOE Gov Bailey who will be speaking at an economic forum tomorrow evening, the only relevant GBP economic factor for the week. 

NZD

The AUDNZD opens the day lower, with the pair sliding into this morning’s open of 1.2410. GDT Price Index came out higher last night, reading 1.2% up from -1.1%.