Aussie Dollar Strengthens Amid Greenback Sell-Off

AUD

The AUD opens higher against the major currencies, as Asian equities and commodities rallied across the board. The ASX closed +1.9%, Shanghai Comp +1.4% and Nikkei +3.9%. The major movers for commodities were Natural Gas -7.3%, Sugar +1.7% and Oil +1.4%. No major data released out of Australia or China last night, with Asian markets looking towards Chinese CPI y/y and PPI y/y at 12:30pm tomorrow. After that, a quiet week data-wise out of Australia and China.
 

USD

The AUDUSD opens higher at 0.7093, reaching fresh 3-year highs of 0.7098 as the USD weakens due to intervention fears resurfacing. Japanese Prime Minister Sanae Takaichi won a supermajority in their snap election over the weekend, with markets predicting business-centric policies which has led to the JPY weakening. This has caused the USD to weaken as markets expect the US Fed to intervene and attempt to strengthen the JPY. Wall Street closed marginally higher, with the Dow Jones +0.1%, S&P500 +0.5% and Nasdaq +1.1%. No economic data out of the US yesterday, however tonight will see Core Retail Sales m/m and Retail Sales m/m – expected to release at 0.3% and 0.4% respectively.
 

EUR

The AUDEUR opens higher at 0.5954, reaching weekly highs and nearing 10-months highs of 0.5966. On equities, the DAX closed +1.2% and CAC +0.6%. A quiet day yesterday except for ECB President Lagarde speaking about the state of the European Union’s economy. In her speech she mentioned that they remain focused on price stability and expect inflation to stabilize sustainably at the 2% medium term target. No data for the rest of the week out of the Eurozone, as a majority of the currency pair’s volatility will be from macroeconomic factors.

GBP

The AUDGBP opens higher at 0.5180, hitting new 15-month highs due to a combination of the recent BoE interest rate decision and Aussie Dollar strength. No economic data out of England yesterday, as the FTSE closed slightly higher at +0.2%. The next data piece that markets are waiting for is GDP m/m on Thursday night; current expectations is figure of 0.1%.
 

NZD

The AUDNZD opens at 12.5-year highs, currently at 1.1713 as markets develop a risk-on attitude. No data released until Friday, when BusinessNZ Manufacturing Index, Visitor Arrivals m/m and Inflation Expectations q/q release.