Aussie Dollar Steadies Ahead of Employment Data

AUD

The Australian Dollar opens largely flat against the majors this morning ahead of the release of key employment data later this morning. Asian equities were lower yesterday with the Hang Seng closing -1%, Shenzhen -0.5% and the Nikkei -0.2%. Locally the ASX 200 closed +0.3% as materials and energy sectors led gains. In Australia, labour force data for June will be released later this morning at 11:30am. It is expected that there will be a moderate pace of employment growth of 15k, as recent job ads and business survey data have indicated some softening in labour market conditions. If this pace of employment growth is realised, the unemployment rate should remain steady at 4.4% (a little above earlier RBA forecasts).

USD

AUDUSD loses its 0.70 handle opening lower this morning at 0.6988 as the greenback strengthened following the latest US-Iran Strikes. Another quiet session ultimately ended with the Nasdaq closing -.6%, and both the Dow Jones and the S&P 500 unchanged on the day. Geopolitical risks remain elevated after President Donald Trump warned that the United States would strike Iranian bridges and power plants if Iran attacks another ship in the Strait of Hormuz. The move did not last long however even as Iran responded by saying that they would attack regional infrastructure if the U.S. attacked Iranian bridges and power plants. Nothing major set for release out of the US today with only Unemployment Claims later this evening which are expected at 211k from a previous 208k.

EUR

AUDEUR opens lower this morning at 0.6125 after what was an uneventful day out of the Eurozone with no data. Eurozone equities closed in the green with the DAX +0.6%, and the CAC +0.9%. In European news, the ECB will announce its monetary policy decision tonight. Market expectations see very little chance of a policy move at this meeting with forecasts pointing to a hold at 2.40%. The focus will be on post-meeting commentary from President Lagarde, as the market is pricing a 90% chance of a hike in September. Recent comments have provided little indication on where policy could be headed in the coming months, with some pointing to energy price developments as likely to dictate decisions. It is expected that ECB president Lagarde will try to avoid forward guidance and instead suggest the need to take a wait and see approach while energy market uncertainty continues.

GBP

AUDGBP opens slightly lower at 0.5226 despite the UK’s softer inflation data released yesterday. CPI y/y came through at 2.6% (exp 2.7%) and Core CPI y/y 2.6% (exp 2.5%). UK equities close in the green with the FTSE +1.2%. Nothing major set for release today out of the UK, with only their CBI Industrial Order Expectations later this evening which is not expected to move markets.

NZD

AUDNZD opens slightly higher this morning at 1.2024. Nothing of note from our Kiwi neighbours yesterday with only their credit card spending which came through lower than previous at 3.1%. Another quiet day for the NZD with nothing set for release.