Aussie Dollar Softens Ahead of US Fed Decision
AUD
The Aussie Dollar opens largely flat against the majors this morning as risk appetite remains negative in the market due to a tech stock selloff and geopolitical risks in the Middle East. Asian equities ended mostly lower yesterday with the Hang Seng -1%, Shenzhen -.7% and the Nikkei flat. Locally the ASX 200 fell -.8% as materials and energy sectors led losses of -2.2% and -1.6% respectively. Another quiet day for Australia data wise, however across Asia a flurry of economic data out of China was released which saw August Retail Sales y/y print at 0.4% (Est. +0.8%) and Industrial Production come in at 5.2% y/y (Est. +4.8%). As the rest of the week is light for economic data, markets await RBA Gov Michelle Bullock's speech this Friday for any future guidance on monetary policy.
USD
AUDUSD opens a touch lower at 0.7130 as US markets were weighed down by another sharp rise in oil prices due to crude loadings in Saudi Arabia being suspended. A softer night on Wall St. ahead of tomorrow’s key FOMC rate decision saw the Nasdaq close -0.8%, the S&P 500 -0.6%, and the Dow Jones -0.4%. U.S. 10-year yields rose slightly to 5.01%, while Brent Crude rose 3% to $108.70 a barrel. Yesterday, U.S. Empire Manufacturing for September printed at 7.6, down from 20.6 and well short of expectations of 15.0, with little reaction to the data. The main event tonight will be the FOMC's Rate Decision, with markets currently predicting a 25bps hike to bring the rate to 4.00%. Inflation measures have remained elevated following the rise in oil prices, while the labor market continued to show signs of improvement. US Retail Sales will also be released tonight, which are currently forecasted to show a rebound from the previous month.
EUR
AUDEUR opens flat at a rate of 0.6178 as the pair awaits the results of the FOMC decision. European equities were weaker at the close, with the DAX and CAC coming in at -0.8% and -0.6% respectively. Eurozone Trade Balance data was released yesterday and showed a surplus in trade in goods with the rest of the world, printing at 5.0B (exp 3.7B) from a previous 1.0B. Some minor data out today with Industrial Production m/m which will do little to move markets.
GBP
AUDGBP opens flat at 0.5290 ahead of the Bank of England's interest rate decision tomorrow evening. UK equities closed in the red, with the FTSE down -0.6%. Yesterday, the UK Unemployment Rate printed in line with market expectations at 4.9% and the August Jobless Claims Change came in at 27.8k (Prev. -11.0k). Later this afternoon, CPI y/y inflation data is set for release and is currently forecasted at 3.1% from a previous 2.9%, marking the last data point before the BoE meets tomorrow.
NZD
AUDNZD continues its rise to open higher at 1.2379 this morning. Some minor data out this morning for the Kiwi, with Westpac Consumer Sentiment printing at 89.5 from a previous 80.4 and the Current Account coming in at -1.67B (exp 2.57B) from a previous 1.09B.