Soft US Data Boosts Aussie Dollar
AUD
The Aussie Dollar opens in the green against the majors this morning after disappointing US growth data and suspected intervention against the Japanese Yen. Asian equities finished mixed yesterday with the Nikkei +0.7%, Hang Seng +0.2% and Shenzhen -1.1%. Locally the ASX 200 shed -0.8% as materials and consumer discretionary sectors led losses at -1.6% and -1.4%. A sudden surge in the Japanese Yen late last night fueled speculation that Japanese authorities intervened to support the currency which caused AUD/JPY to drop roughly 1.75% on the day. Some minor local data out yesterday with Building Approvals m/m, which rose 7.2% m/m (Est. -0.7%). PPI q/q and Private Sector Credit m/m will be out later this morning to close out the week for the Aussie. The Bank of Japan's Monetary Policy Decision will be announced today with markets pricing almost no chance of another hike at the upcoming meeting. Ongoing depreciation in the yen and higher energy prices are likely to be a key focus, given the associated inflation pressure.
USD
AUDUSD opens higher at a rate of 0.7028 as the Greenback weakened sharply following softer than expected economic data released overnight. US Core PCE inflation data for June rose 0.1% MoM (exp 0.2%), Personal Income and Personal Spending were +0.2% and +0.3% respectively, both weaker than expectations by 0.1%. Advance GDP q/q released at +1.5%, lower than forecasts of +2.0% and weekly jobless claims data was a little better than expected with initial claims at 197k (200k exp). A solid rebound on Wall St. overnight saw the Nasdaq close +2.8%, the S&P 500 +1.7%, and the Dow Jones +1.2%. Some more data out of the US expected late this evening with Employment Cost Index q/q, Chicago PMI, Revised UoM Consumer Sentiment and Revised UoM Inflation Expectations.
EUR
AUDEUR opens this morning in the green at a rate of 0.6097 off the back of US Dollar weakness. European markets closed higher with the DAX and CAC coming in at +0.6% and +0.9% respectively. Yesterday, and German CPI for July released and rose .8% MoM and 2.8% YoY with both 0.1% higher than expectations. Later this evening, Core CPI Flash Estimate y/y is expected to release and is currently forecasted at 2.4%.
GBP
The AUDGBP opens the day higher, with the pair grinding upwards yesterday, opening this morning at a rate of 0.5219. British equities were soft into the close, with the FTSE finishing the day down 0.1%. The Bank of England held its official rate at 3.75% in another split vote overnight, with three of the nine rate committee members voting to hike, one more than the last decision. However, Governor Andrew Bailey pushed back against market expectations for a hike; stating “do not leave this room thinking that the BoE is edging towards a hike”. It is a quiet end to the week, with the nationwide HPI m/m being released this afternoon, expected to lift to 0.1% from 0.0%.
NZD
The AUDNZD opens the day lower, with the pair continuing it’s downward trajectory, reaching a weekly low overnight, opening this morning at 1.1954. ANZ Business Confidence came out higher at 56.1, previously at 36.6. there is no further data out this week.