AUD Hits Three Month Peaks as Jackson Hole Approaches

AUD

The Aussie Dollar continues to climb against the majors, as higher local household spending keeps the RBA’s forecast on its toes. Asian Equities were mixed into the close, with the ASX down -1% and the SHANGHAI COMP closing up +1.1%. Australian household spending rose 1.1% in July, well above market expectations for a 0.3% rise, and with annual growth at 7%. Discretionary spending led the rise, which suggests that consumer demand remained resilient, adding upward pressure on inflation which keeps the pressure on the RBA to hike rates again in November. Australian capex spending took a breather in the second quarter, falling 3.6% from Q1, although it is still up nearly 11% over the year due to data centre investment. Looking forward there is no further data being released this week, with next week’s GDP q/q being the market’s next focus locally. 

USD

AUDUSD opens the day higher, with the pair pushing into a 3-month high, opening this morning at a rate of 0.7195. The technology sector spurred Wall St. overnight and saw the Nasdaq close +1.6%, the S&P 500 +.7%, and the Dow Jones +.2%. US weekly jobless claims data was modestly better than expected with initial claims falling to 203k against expectations of 208k while continuing claims fell to 1.778 mio against expectations of 1.792 mio. US Treasuries were steady overnight ahead of US Fed chair Kevin Warsh’s much-anticipated Jackson Hole speech. Economists expect Warsh to emphasise the Fed’s commitment to returning inflation to target and outline the strategic challenges facing monetary policy. Tonight will also see the University of Michigan’s Revised Inflation Expectations and Consumer Sentiment, expected to remain unchanged.

EUR

AUDEUR breaches a 3-month high, flirting with the 0.6180 barrier last night, opening this morning at a rate of 0.6173. European equities were mixed into the close, with the DAX up +0.3% and the CAC closing down -1.7%. The ECB Monetary Policy Meeting Accounts released last night, with the primary takeaway being that European Central Bank policymakers viewed their July decision to hold interest rates steady as a temporary "pause" rather than the end of the tightening cycle, explicitly noting that another rate hike will likely be necessary unless the inflation outlook improves significantly. Tonight will see French Prelim GDP q/q (Est. 0.2% from 0.2%) and French Prelim CPI m/m (est. 0.7% from 0.6%.), a quiet end to the week.

GBP

AUDGBP opens the day higher, with the pair edging up against the 0.53 barrier overnight, opening this morning at a rate of 0.5291. British Equities closed in the red, with the FTSE down -0.8%. The Brits have a quiet end to the week data wise, with no releases yesterday and again today. They will then be observing a bank holiday on Monday. 

NZD

The AUDNZD opens a touch higher, with the pair making some gains on yesterday’s open, then giving them up overnight, opening at a rate of 1.2080. There was no news out yesterday or for the rest of the week. Next Wednesday the RBNZ will meet to decide the Official Cash Rate.