The Australian dollar was able to benefit again from a softer US dollar and was able to peak at 91.66 US cents overnight. The Australia dollar originally fell after mixed Chinese data but the large spike in retail sales to 13.7% was evident in the demand for the Australian dollar through the European and US sessions. The Euro again maintained its recent bullish trend against the Greenback and just fell shy of hitting 1.38 USD, which is nearly a 3 cent move across the last seven days. ECB President Draghi speech overnight drew a blank for notable sound bites and that helped continue the demand driven from lack of monetary policy change from the ECB which was expected last week.
The Pound wasn’t able to climb much higher in trading overnight as confidence in the economic performance earlier in the week was not backed up by the numbers overnight. Whilst overall they were ok numbers, there were none that outperformed. Manufacturing Production and Industrial Production came in on target but lower than last month and the Trade balance unexpectedly widened with the Pound at 1.6446 USD putting a break on recent gains. The Yen also reversed its recent deprecation with softer global equities helping drive risk off demand. The US dollar is back below 103 Yen whilst the Euro is at 141.5 Yen.
After a solid day of data economic releases during the trading session, todays docket is quite empty with only Westpac Consumer Sentiment likely to effect AUD driven sentiment. The AUD has eased through this morning from overnight highs but remains steady at 91.5 US cents this hour.
The overnight trading sessions saw a broadly risk on session with the US dollar and Japanese Yen having very little support. The Pound was able to trade above 1.64 USD and was up over a cent versus the Greenback in the last 24 hours as UK economy confidence drove it rise. Economic confidence was gained from BOE Governor Carney speech a few hours ago to the Economic Club of New York, with Carney highlighting the positive trend with recent economic data. The Euro also rode overnight risk sentiment to peak at 1.3745 USD a few hours ago and is still not far away for that high. The Euro strength wasn’t data driven rather a continuing of the recent bull trend has confidence is the currency resumes as talk dissipates of any changed to monetary policy by the ECB in the near term.
The Australian dollar saw much less movement than the other major pairs in trade overnight and is 20 pips lower than we opened yesterday. Chinese CPI data coming in on market estimates failed to spark any volatility and saw the Aussie ease through the Asian session. It improved by about 40 pips through the next two sessions as the US dollar broadly weakened. The Yen sold off against every cross during this bullish overnight trading session with the Euro close to 142 Yen and the US dollar now firmly above 103 Yen.
The Australian dollar may have had a tempered in the last 24 hours but the next 8 hours are likely to be much more active. This morning sees the release of NAB Business Confidence and Home Loans data which is bookended this afternoon by Industrial Production and retail sales data from China. Later tonight support for the Pound will be tested with Trade balance and Manufacturing Production data.
Weekend Chinese data has been the driver for a positive start for the Australia dollar for the beginning of trading this week. The Australian dollar has opened at 91.21 US cents after we saw China Trade balance data show exports rise resulting in a four year trade surplus high. The Euro has also a notable start to the week opening above 1.37 USD as last week’s ECB decision to keep monetary policy unchanged underlines support the currency which also broke past 141 Yen this morning.
The Yen has been softer across the board on the opening of trade this week with the Australian dollar up at 94 Yen, not far away from last months traded high. The Yen will be actively traded through this morning with Final GDP and the Current account due for release in the next hour. With the US dollar back above 103 Yen in the last few minutes any under shoot from GDP could fuel bets that the Bank of Japan will need to increase their own QE package in 2014 fuelling further Yen depreciation.
Chine trade balance data has shaped the open of currency trading, it’s likely that CPI data from China will govern risk sentiment for the rest of the trading day. Any number higher than 3% will likely continue the resurgence of the AUD today versus the Greenback but it has a lot of ground to recover versus the Kiwi, with the Aussie buying 1.0993 NZD currently, roughly 2 cents down through this month’s trading. Likely to help the AUD cause further will be ANZ Job Advertisements which has seen the 2013 trend of constant falls having stabilised with jobs ads remain close to steady for the last 2 months and that trend is expected to remain this month also.
The magnitude of data released and already built in risk sentient from trading this week saw some large movements both expected and unexpected through the overnight session. The Euro surged after the ECB’s meeting and Mario Draghi’s speech were the deflation risk was downplayed and no changes were made to their monetary policy tools. The Euro is still near highs at 1.3673 USD this morning after it fell to lows of 1.3543 USD in the lead into the press conference. The Pound on the other hand got no bounce from the Bank of England’s expected decision to keep rates and monetary stimulus on hold. The Pound was just above 1.64 USD as the Australian session was closing yesterday and at its worst was down 1 cent to 1.63006 before it rebounded through the US session by about 35 pips.
The surprise in trading was the rebound that the Pound had and the Aussie also which traded 70 pips up versus the Greenback even after really positive economic data from the States. Preliminary quarterly GDP from the US showed a jump to 3.6% and weekly unemployment claims dropped below 300,000 for the first time in 11 weeks. The data however didn’t drive US dollar support as you would have expected with the 3rd quarter numbers not expected to be backed up in the final quarter on 2014 and some trepidation leading into tonight’s Non-farm Payroll print.
The Asian session is largely free of economic data although most trading positions taken today will largely be in reference to tonight’s NFP and Unemployment Rate in the States which expected to drop to 7.2%. The Australian dollar has managed to hold onto most of its overnight gains and now sits at 90.62 US cents.
The Australian dollar was unable to maintain yesterday’s bullish run and began to ease after it hit 91.68 US cents yesterday evening. The Aussie fell in parallel to the Euro which had traded at 1.3615 USD and went on to shed 90 pips through the European session. Even with Italian and European manufacturing PMI hitting estimates, a large drop in the Spanish number which now shows the sector contracting sparked the selloff of the Euro. The selloff in reflection seemed a little overplayed with the data not that significant to the whole Eurozone but traders are a little tepid awaiting the risk with the ECB’s rates decision later in the week. The US dollar was able to hold onto the gains versus its peers through the US session with solid reads from Construction Spending m/m and ISM Manufacturing PMI supporting the US economic outlook and expected tapering timeline.
The Pound peaked at 1.6442 USD yesterday and from there it was all downhill through to the close in New York. The pullback was more to do with profit taking after the Pound was at its highest level versus the Greenback in 2013 and is only 2.5 cents away from Aug 2011 high which will likely be the next key level of long term resistance. The confidence in the UK economy remains after Manufacturing PMI reached its highest level since March of 2011, so we do expect the Pound to resume gains in the near term.
It is a busy day from those trading the AUD today with Retail Sales data and the Current Account expected to come in at 0.4% and -$11.1Billion respectively at 11.30am. Then we move to the RBA decision and statement with the market expecting a largely balanced released. From a currency perspective the Aussie is down 4 cents from last time, but we may see the Governor Stevens keep the foot on the throat so to speak to keep the depreciation bias rather than congratulate himself on its move down in the last month.
The Australian dollar has begun the week ahead of Friday’s close buying 91.29 US cents and continuing on from Friday where it gained 1 cent versus the Greenback. The Aussie however has started down versus the Kiwi after it was as high as 1.1256 NZD on Friday, trading lower at 1.1177 NZD through the first 30 minutes this morning. The bounce in the Australian dollar was as a result of Chinese Manufacturing PMI coming ahead of estimates to match last month’s read of 51.4. The other major currency pairs have started the week broadly in line with where they closed on Friday with little other news over the weekend to cause significant markets gaps.
This trading week is absolutely jam packed with key economic risk events and each day is heavily stacked which should see volatility remain elevated for this first week of December. Tomorrow will be very AUD focused with the morning start met with Australian Current Account and Retail Sales data with Chinese Non-Manufacturing PMI to be released before lunch, then after lunch our Rates decision. Wednesday has Australian quarterly GDP expected to come in at 0.7% with a bunch of services PMI data from the UK and Europe to follow in the evening. From a Greenback perspective we have Trade Balance, New Home Sales, Preliminary GDP and the Non-Farm Employment Change to finish the week. Sandwiched in there also is the European Central Bank’s and Bank of England’s rates decision.
The Australian dollar will continue to be in focus today as we Building Approvals and inflation data hitting the market this morning. The HSBC Final Manufacturing PMI from China is likely to be the key risk event after the Government figure from the weekend. Looking ahead to tonight Europe and the UK have Manufacturing PMI released which all are expected to be in expansionary phases.
Mass currency correlation was not at all evident in the trading of the US dollar overnight in the lead into Thanksgiving holiday in the States which brings global markets to a halt. The Australian dollar nearly gave up all of yesterday’s gains in the last few hours of the European session falling more than half a cent to be at lows of 90.82 US cents and currently only sits 17 pips above the mark in early trade today. The US dollar continued is solid march against the Yen and is sitting quite close to its recent high at 102.3 Yen even with obviously no US data released overnight to spur any sort of evident Greenback demand.
The Euro and Pound where highly volatile through the overnight session but did manage to both finish at new key levels by this morning. The Euro briefly traded above 139 yen, breaking through 2009 highs and up 2500 pips this year. The data released didn’t really guide trade with no key releases being particularly market moving except for Bank of England Governor Carney’s speech and financial stability report affirming that the economic recovery was getting stronger. The Pound spiked up after the release to above 1.63 USD, pulled back slightly then resumed the gains through the US session to peak at 1.6357 roughly a 150 pips up in 24 hours.
Today’s local session will be largely influenced by CPI data from Japan with inflation expected to continue to rise. The Bank of Japan will be confident that their QE plans have taken shape in a timely manner when Core CPI was at 0% in June and now is expected to be at 0.9%. The speed of the inflation expansion will take the pressure off the BOJ from having to add further funds to their 7 trillion yen that they currently inject each month and may somewhat limit the deprecation the Yen has seen in recent weeks.
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The US dollar continued its surge versus risk currencies this week with economic data fuelling the tapering sentiment trading exposures. The Australian dollar slumped to 90.65 US cents with the losses firstly beginning late in the European session and then compounded by US dollar demand from weekly unemployment claims back down close to the 300,000 mark. The Greenback really took off against the Yen and is above 102 Yen for the first time since May this year. A drop in Durable goods orders was largely ignored with the Government shutdown taking the one off blame for the print.
Economic data was the trigger again for further confidence in the UK economy, this time with GDP increasing to 0.8%, matching the initial estimate. The Pound was able to trade up to 1.6323 USD before easing back about 30 pips from those high this morning. From those long versus the Australian dollar it caps off 9 cents of gains across the last 8 days. Like the US dollar bounce second tier data misses from Preliminary Business Investment and Realised Sales in the UK failed to dampen the confidence in the Pound.
Today’s local session finally sees some economic driven impetus with HIA New Home Sales and Private Capital Expenditure due for release today. Capex is likely to contract after last quarters surprise 4% jump and the continued negative AUD outlook will likely remain if estimates are met. Regionally we have retails sales from Japan and that will likely give us more of a picture of consumer led inflation with CPI up for release tomorrow.
The negative rates speculation cycle was back in full swing in trading of the Euro overnight with comments this time dampening expectations that they could be implemented in the near term. The Euro had a brief fall back to 1.3521 USD before powering to 1.35774 as comments from ECB Executive Board member Benoit Coeure during an interview helped push the currency higher. The Euro continues to creep even closer to 139 Yen mark getting within 110 pips of the key level whilst we saw the Greenback continue to ease versus the Yen, down 50 pips from Mondays high of 101.91 Yen.
The Australia dollar really struggled through last night’s European session after it had been as high as 92 US cents through yesterday’s domestic session. The Aussie dropped below 91 US cents for the first time since August but for some support to be back up from 91.28 Us cents with the ongoing RBA intervention comments and sentiment doing exactly what the RBA intended, lowering the AUD.
The Asian session has seen much of the volatility from last night pared back but we yet again see the Australian dollar struggling against the Kiwi Dollar with the New Zealand trade balance deficit shrinking more than expected. The Australian dollar is now 1.1127 NZD after the trade balance came in at NZ-$168 m and likely to retest last night lows.← Older posts