AUD Slides After Upbeat US Manufacturing Data

AUD

The Aussie Dollar drops against the majors this morning, despite Donald Trump calling off a “big strike” on Iran. Asian equities finished mixed yesterday with the Hang Seng +0.5% and the Nikkei and Shenzhen both at -1%. Locally the ASX 200 closed +0.5% as utilities and industrials sectors outperformed at +2.1% and +1.4%. Australian private sector credit rose 0.8% in June, which was higher than market expectations for growth of 0.6%. Yesterday saw the RatingDog Manufacturing PMI drop to 50.9, expected at 51.9 from 51.7. looking forward it is a quiet week ahead, with Household Spending m/m released tonight, expected to drop to 0.2% from 1.3%.

USD

The AUDUSD opens the day lower, with the pair dropping the 0.70 handle late into the Monday’s session, opening this morning at a rate of 0.6992. Wallstreet was up into the close, with the DOW JONES +1.3%, S&P 500 +1.5% and the NASDAQ +2.1%. This investor confidence was largely fueled by increased optimism regarding a deal between Iran and the United States. U.S. Manufacturing PMI for July was revised up slightly to 53.9 from an initial reading of 53.8, and ISM Manufacturing for July rose to 55.6, up from 53.3 and above expectations of 53.9. Looking forward, Jolts Job Openings are set to release tonight, looking to soften to 7.44M from 7.59M. All eyes will be squarely on Friday’s employment report, with a strong market paving the way for further hikes is the Fed chooses so.

EUR

The AUDEUR has opened the day lower, with the pair reaching a monthly low overnight, opening this morning at a rate of 0.6081. European equities were bullish into the close, with the DAX closing up 1.5% and the CAC up 1.2%. On Friday Eurozone inflation data for July showed headline CPI matching expectations by picking up to 2.9% year-on-year, while core CPI unexpectedly ticked higher to 2.5%. The uptick in underlying price pressures highlights lingering inflation stickiness across the bloc, supporting a more cautious approach from the ECB regarding future rate cuts. Last night saw Manufacturing PMI’s released, all coming in close to expectations except France which came under. Tonight will see the Services PMI’s set to be released, with the Final Services PMI expected to remain at 51.6. 

GBP

The AUDGBP opens the day lower, with the pair dropping below the 0.52 barrier last night, opening this morning at a rate of 0.5212. British equities were soft into the close, with the FTSE finishing down 0.1%. Friday night saw MPC member Pill speaking, stating that the BOE is not edging toward a rate increase. Monday saw the Final PMI being released at 51.9, expected to remain at 52.8. looking forward it is a quiet week for news, with Wednesday having Final Services PMI set to be released, expected to remain at 51.8.

NZD

The AUDNZD opens the day lower, with the pair dropping to a 4-month low, opening this morning at a rate of 1.1926. Yesterday saw Business Consents m/m rise to -3.6% from -4.9%. Looking ahead, tomorrow will see the NZ labour report set for release, with unemployment forecasted to increase to 5.3% from 5.4%.