Aussie Dollar Recovers on Ceasefire Extension Progress
AUD
The Aussie Dollar opens slightly up against the major currencies, as risk sentiment improved due to talks of a 60-day ceasefire extension between the U.S. and Iran. Asian equities closed down overall yesterday, with the ASX -1.4%, Shanghai Comp +0.1% and Nikkei -0.5%. Commodities were mixed on the close, with the largest movers being Sugar -1.5%, Copper +1.3% and Cotton +1.1%. Yesterday was quiet for economic data out of Asia, outside of Australian Household Spending m/m and Private Capital Expenditure q/q. Australian household spending came in at -1.1% (exp -0.5%) and marks the largest plunge in three years. No economic data out of Australia/China today, however Chinese Manufacturing PMI (exp. 50.2) and Chinese Non-Manufacturing PMI (exp. 49.5) is due to be released on Sunday.
USD
AUDUSD opens up this morning at 0.7163, recovering from yesterday’s lows of 0.7098 as reports of a peace deal between the US and Iran gathers momentum. The AUDUSD originally lost the 0.71 handle when US and Iran traded strikes, accusing each other of breaking the ceasefire. However, reports have shown that a new 60-day ceasefire has been agreed and is awaiting President Trumps approval. The deal would have Iran remove mines in 30 days, not pursue nuclear weapons, and have unrestricted movement in the straight. Wall Street opened higher as a result of the improved risk sentiment, with the Dow Jones +0.0%, S&P 500 +0.6% and Nasdaq +0.9%. Yesterday also had Core PCE Price Index m/m (+0.2% vs exp. +0.3%) and Prelim GDP q/q (+1.6% vs +2.0%). No American economic news to be released today, besides FOMC members speaking at the Chamber of Commerce Southern New Jersey.
EUR
The AUDEUR opens slightly higher at 0.6148, trading between 0.6125 and 0.6150 yesterday as the AUDEUR reacted to market risk. Last night, ECB President Lagarde spoke at the 28th meeting of Francophone Central Bank Governors however nothing of note was mentioned. European equities fell slightly, with the DAX -0.3% and CAC -0.2%. Today will have German Prelim CPI m/m, expected to release at 0.1%.
GBP
The AUDGBP opens slightly higher at 0.5327, trading between 0.5303 and 0.5331 as the currency pair tracked with prevailing risk sentiment. No major economic news out of England yesterday. On equities, the FTSE closed -0.8%. Tonight, BOE Gov Bailey will speak at the Reykjavik Economic Conference.
NZD
The AUDNZD opens lower at 1.2054, as traders continued to bet on future interest rate hikes out of New Zealand. These bets stemmed from the RBNZ mentioning that they were on the verge of increasing interest rates on Wednesday. ANZ Business Confidence is due later this morning with nothing major on the horizon as New Zealand will be observing a bank holiday on Monday (King’s Birthday).