Aussie Dollar Gains Ahead of Key Inflation Data

AUD

The AUD opens higher against the major currencies, as Australian inflation expectations skyrocket due to supply chain and energy disruptions. Asian equities were relatively flat, with the ASX closing -0.1%, Shanghai Comp -0.3% and Nikkei +1.0%. Commodities were similar, with the largest movers being Copper -0.9%, Silver +0.6% and Wheat -0.6%. No economic news out of Australia or Asia for the past few days, however Wednesday will see Aussie inflation figures at 11:30am. Current expectations of CPI m/m is 1.3%, and CPI y/y of 4.8% which would be the highest reading since 2021. Major volatility can be expected as markets digest these record levels.

USD

The AUDUSD opens at 0.7187, increasing by 1.0% over the weekend as markets are hopeful for a Middle Eastern resolution. President Trump is reportedly expected to accept a proposal to end the war and reopen the Strait of Hormuz, due to mounting economic and political pressures ahead of the American Mid-Terms. Wall Street enjoyed a boost from the news, with the S&P500 closing +0.8%, NASDAQ +1.6% and Dow Jones -0.2%. No news today out of the US, with the next data piece being CB Consumer Confidence on Tuesday night.

EUR

The AUDEUR opens at 0.6132, rising from the weekend’s lows of 0.6090 as markets adopted a risk-on attitude. Risk sentiment has greatly improved due to expectations of an end to the US-Iran War, allowing for risk-based assets such as the AUD to strengthen. European equities were slight soft on the close, with the DAX -0.1% and CAC -0.8%. No economic news from the Eurozone until Thursday night, with their inflation estimates.

GBP

The AUDGBP opens at 0.5310, having dropped sharply to 0.5257 on Monday before recovering to current levels. British equities fell over the weekend, closing at -0.7%. No economic news out of England over the weekend and nothing major out of England for this week.

NZD

The AUDNZD opens at 1.2162. No news out of New Zealand over the weekend, with RBNZ Gov Breman Speaking at Wednesday 10:30am.