Aussie Dollar Rises as RBA Hike Bets Intensify

AUD

The Aussie Dollar opens slightly higher against the major currencies, as markets start to increase their bets on future interest rate hikes from the RBA. The RBA has their next interest rate decision on September 29, with markets now expecting a 55% chance for a hike at that meeting. Asian equities ended mixed yesterday with the Nikkei +2.1%, Shenzhen +0.6% and Hang Seng -0.9%. Locally the ASX 200 closed +.1%, as energy and material sectors outperformed at +1.8% and +0.4%. ANZ Job Advertisements m/m came in at +2.5% from a previous 1.9%, showing a slight improvement in the local employment figures.

USD

The AUDUSD opens slightly higher at 0.7218, rising from yesterday’s lows of 0.7194. A quiet session overnight with the U.S. out for the Labour Day holiday. U.S. equity futures slipped slightly during the shortened session with the Dow Jones closing -.5% and the S&P 500 -.2%.  U.S. Treasury markets were closed, while Brent Crude rose .8% to $97.30 a barrel.  Another quiet day today with no major data being released. Markets will be waiting until American inflation figures are released this Friday night.

EUR

The AUDEUR opens flat at 0.6208, trading sideways between 0.6200 and 0.6215 due to minimal data released yesterday. European equites closed mixed, with the DAX -0.2% and CAC +0.3%. No major news out of the Eurozone until Thursday night, with the European Central Bank interest rate decisions. Markets are pricing in a 98% chance of an interest rate hike, however the associated press conference will provide clues to the ECB’s future plans.

GBP

The AUDGBP opens flat at 0.5330, trading sideways between 0.5328 and 0.5338 over the past 24 hours due to the lack of data yesterday. British equities closed slightly lower at -0.1%. Tonight will have Monetary Policy Report Hearings, with a few MPC members testifying on inflation and the British economic outlook. 

NZD

The AUDNZD opens slightly higher at 1.2278, with no major economic data out of New Zealand this week. Manufacturing Sales q/q released earlier this morning at 3.1% (prev 3.1%) but did little to move markets.