AUD Stagnant Ahead of Local CPI and US Fed Decision

AUD

The Aussie Dollar opens mixed across the majors off the back of improved risk sentiment following a pause in hostilities between the US and Iran. Asian equities ended higher yesterday with the Shenzhen +1.1%, Hang Seng +1% and the Nikkei +0.5%. Locally the ASX 200 gained +1.4% as technology and materials sectors outperformed at +4.5% and +2.4%. This afternoon, RBA Governor Michelle Bullock is due to speak at the Anika Foundation Fundraising Lunch, in Sydney and investors will be looking for comments on inflation and the future path of interest rates. Attention will then shift to Wednesdays CPI inflation report, which last increased 0.4% MoM and 3.6% YoY, showing that underlying inflation remained elevated.

USD

AUDUSD opens flat this morning at a rate of 0.6988 as tentative peace talks begin between the US and Iran. A relatively subdued start to the week on Wall St. saw the Dow Jones close +0.5%, the Nasdaq -0.2%, and the S&P 500 unchanged. U.S. 10-year yields fell 4bps to 4.64%. Overnight, President Trump said that “we are having good talks” with Iran but that he is also not interested in prolonged negotiations. he also again denied that the United States is low on munitions in a speech earlier this morning . Later this evening will see the release of ADP Weekly Employment Change, Goods Trade Balance and CB Consumer Confidence for the US. The main focus now shifts to tomorrows Fed meeting, which is currently expected to keep rates at 3.50%–3.75%, while Chair Kevin Warsh’s remarks will guide the US Dollar’s next move.

EUR

AUDEUR opens flat at 0.6146 this morning. European equities closed in the green with the DAX up 1% and the CAC up 0.4%. A bit of data for the Eurozone yesterday however, not impactful to currency markets. Today being similar with the Spanish Unemployment Rate set to print at 10.1% and German Buba Monthly Report. 

GBP

AUDGBP opens in the green at 0.5259, hovering around a one month high. UK equities see a slight bump, with the FTSE closing up +0.4%. Earlier this morning the BRC Shop Price Index y/y printed at 0.9%, missing expectations of 1.1% from a previous 1.2%. No major data for the UK until the Bank of England meets on Thursday to decide the Official Bank Rate.

NZD

AUDNZD continues its recovery, to open at a rate of 1.2103. A quiet week on the economic calendar ahead for New Zealand, with the ANZ Business Confidence the sole data point for the week on Thursday.