Aussie Dollar Climbs as US Fed Hike Bets Fade

AUD

The Australian Dollar opens higher across the board despite increased tensions in the Middle East weighing on risk sentiment overnight. Asian equities closed higher yesterday with the Shenzhen +1.6%, Hang Seng +1.3% and the Nikkei +0.7%. The ASX 200 closed -0.5% as consumer discretionary and financials sectors underperformed at -3% and -1.8%. Across Asia, a flurry of data out of China yesterday saw July Retail sales print 0.6% y/y (Est. +1.5%) and Industrial Production at 4.5% y/y (Est. +5.0%). The Unemployment Rate also ticked up to 5.2% (Est. 5.1%) from a previous 5.0%. Little in the way of local data with only Westpac Consumer Sentiment set for release later this morning at 10:30am with no current forecasts. Tomorrow however we have our Wage Price Index q/q forecasted to remain at 0.8%.

USD

AUDUSD opens higher at a rate of 0.7105 after a run of soft data and despite worsened tensions in the Middle East. President Trump was in the headlines stating that he did not think that Iran would make a deal and reiterated the idea that the Strait of Hormuz could become U.S. territory. Wall St closed in the red with the Dow Jones trading -0.5%, the Nasdaq -0.4%, and the S&P 500 -0.3%. US Empire Manufacturing for August released overnight and rose to 20.6, up from 15.6 and better than expectations of 10.0. Some minor data for the US today with housing starts and building permits data for July set to be released tonight. Housing starts are expected to decline modestly after rebounding during the previous month, while building permits are forecast to remain relatively unchanged.

EUR

AUDEUR opens higher this morning at 0.6136, maintaining 3-week highs despite a drop in risk sentiment. European equities markets closed lower across the board after sliding in late trade with the DAX -0.4% and the CAC -0.7%. No major Eurozone data set for release today, with only ZEW Economic Sentiment, and German ZEW Economic Sentiment, with both forecasted to improve slightly. Looking ahead, ECB President Lagarde is due to participate in a panel discussion at the World Economic Forum's International Business Council meeting tomorrow .

GBP

AUDGBP opens slightly higher this morning at 0.5246. UK Equities closed in the red with the FTSE closing -0.3%. Later this afternoon we will see the UK employment data releases, starting with Claimant Count Change which is expected to almost double from 6.7K to 11.2K, Average Earnings Index 3m/y will be released alongside that which is also set to decrease from 4.3% to 4%. Finally, the UK Unemployment Rate, which is forecasted to drop slightly from 4.9% to 4.8%. CPI Inflation data will be out tomorrow and is currently forecasted at 2.9% y/y from a previous 2.6%.

NZD

AUDNZD opens flat this morning at 1.2033, after yesterday’s FPI m/m saw July Food Prices rise 0.1% m/m (Prior +0.6%) and the July Business Services Index coming in at 50.6 from a revised 50.9. Little in the way of data out of New Zealand today, however tomorrow we will get their GDT Price Index, and their PPI Inputs/Output q/q.