AUDUSD
The Aussie fell heavily on Thursday, closing at 0.7091(-76 pips) against the greenback. Despite producing a stronger Australian job reports for January, the bullish run was very short lived as it was weighed down by the combination of growing RBA rate cut talk and geopolitical concerns over China, a major iron ore port is reportedly stalling Australian shipments. After opening the session at .7163, the AUD/USD rose to as high as .7207 midway through the session, assisted by the release of a strong Australian jobs report for January. However, Westpac Bank ensured the rally didn’t last long, becoming the first of Australia’s big four bank’s to call for rate cuts from the RBA this year.“We have revised down our GDP growth forecasts for 2019 and 2020 from 2.6% to 2.2%,” said Bill Evans, Westpac’s Chief Economist in a statement. “With the slower growth profile we now expect to see the unemployment rate lift to 5.5% by late 2019. That makes a strong case for official rate cuts to cushion the downturn and, in turn, meet the RBA’s medium term objectives.“Westpac now expects the Reserve Bank to cut the cash rate by 25 basis points in both August and November this year.” The announcement saw markets move to price a full 25 basis point rate hike by the end of the year, helping to drag Australian bond yields and dollar lower. The Aussie was delivered a further hit in late Asian trade following a report from Reuters that China had banned imports of Australian coal at the northern Chinese port of Dalian, sparking renewed concern about a growing rift between the two countries.
AUDUSD
AUDUSD
The Aussie made gains on Friday, closing at 0.7130(+23 pips) against the greenback. The gains were aided by rise in commodity prices and gains in global stocks. Moreover, trade optimism and a denial from China that it was deliberately targeting Australian coal imports were also behind the gains for the commodity natured pair. “US President Trump mentioned on Friday there was ‘a very good chance’ the US would strike a deal with China to end their trade dispute and that he was inclined to extend his March 1 tariff deadline and meet soon with Chinese president Xi Jinping,” said Ray Attrill, Head of FX Strategy at the National Australia bank.“Chinese Vice premier Lui He in Washington for the talks and attending Trump’s press conference agreed that there has been ‘great progress’ and that from China’s perspective it is ‘very likely that it will happen and we hope that ultimately we’ll have a deal’.” Trump expressed to reporters that he is likely to meet with Xi in March in Florida to decide on the most important terms of a trade deal. The positive remarks helped to drive commodity prices and stock prices higher, the latter helped by a reduction in expected US stock market volatility in the month ahead. The economic calendar for the Australians are quiet today, which means traders could expect the price action of the Aussie dollar to follow suit with the performances of the Chinese markets.
AUDUSD
The Aussie rose on Monday, closing at 0.7169(+13 pips) against the greenback. The commodity nature currency also rallied against all of the major crosses. Undoubtedly, continued optimism towards US-Sino trade negotiations was the main driver behind the Aussie’s strength. “President Trump twitted ‘I will be delaying the U.S. increase in tariffs now scheduled for March 1. Assuming both sides make additional progress, we will be planning a Summit for President Xi and myself, at Mar-a-Lago, to conclude an agreement. A very good weekend for U.S. & China!”. The news enhanced risk appetite with Asian equities performing across the board while emerging market FX and commodity-linked currencies also joined the party.” The tweets saw the AUD/USD lift above .7150, supported by renewed strength in Chinese stocks and the Chinese yuan which both hit multi-month highs during the session. The buying in the Aussie continued into European trade, seeing the AUD/USD lift to as high as .7184 before easing slightly towards the close. On the data front, today will be a quiet day, leaving Chinese markets to dictate the sentiment level.
AUDUSD
The Aussie continued to strengthen on Tuesday, closing at 0.7182(+11 pips) against the greenback. The Aussie currency hit a one week high against the greenback on Tuesday. After opening the day with 0.7171, the AUD/USD initially fell in Asian trade, weighed down by profit-taking in equities after a strong run on Monday. The move was moving in parallel with the Chinese yuan which hit a multi-month high against the greenback a session earlier. However, after bottoming at .7141, the AUD/USD erased those early losses and more as European markets opened, finding ground in the session following an appearance by Fed Chair Jerome Powell before the US Senate Banking Committee. “Powell reiterated that the Fed would be ‘patient’ with interest rates,” said FX Strategists at the National Australia Bank.“He said the US economy remained healthy, although it faced ‘crosscurrents’ from more volatile financial markets, slowing growth in China and Europe, and uncertainty around US-China trade negotiations and Brexit. Turning to the day ahead, there’s a steady stream of data that carries the potential to generate short-term volatility in the Aussie dollar. Data on Australian construction work undertaken in the December quarter be released at 11.30am AEDT, providing the next partial inputs ahead of Australia’s Q4 GDP report next week.“[It] will be important in so far as the both the private residential and non-residential work done numbers feed into next week’s GDP figures,” says the NAB’s FX Strategy team. “The NAB expects residential work done declined 2.2% in Q4, following the 1% decline in Q3. For private engineering work, we are forecasting a 3% decline — linked to the ongoing completion of major LNG projects — more than offsetting an expected 2.5% quarterly rise in public engineering work.” US Fed Chair Jerome Powell will also be in action, this time before the House Financial Services Committee, which should not be major price action as he has already given the speech prior.
AUDUSD
The Aussie fell on Wednesday, closing at 0.7138(-54 pips) against the greenback. Renewed uncertainty about US-Sino trade negotiations were the main driving factor behind such weakness for the Aussie. Turning to the day ahead, it will be a busy one for Aussie dollar traders with two key releases set to arrive midway through the Asian session. The first is Australia’s Q4 CAPEX report at 11.30am AEDT, the latest data release that completes the whole of Australia’s Q4 GDP. The CAPEX report is a leading indicator that it measures both investment that’s occurred in the past and what’s expected in the future. Given weakness in the GDP inputs received so far, traders will be paying attention to this data more. Alongside the CAPEX report, the Reserve Bank of Australia (RBA) will also release private sector credit figures for January. As is often the case, most attention will be on the housing components given the link between credit growth and home prices. With business confidence and conditions also softening in early 2019, business credit will also be of interest.
AUDUSD
The Aussie fell heavily for the second straight session, closing at 0.7097(-49 pips) against the greenback on Thursday. Stronger than expected US GDP Growth in late 2019 was the main factor behind the fall of the commodity pair. Despite the positive remarks from Larry Kudlow, Donald Trump’s chief economic adviser, that progress in trade negotiations has been ‘terrific’, there was not much reaction to that. After opening the session at .7138, the AUD/USD inched higher in early Asian trade, supported initially by a stronger-than-expected lift in Australian business investment intentions for the financial year ahead. Yet, after touching a daily high of .7165, the Aussie gave back all those gains — and more — following the release of China’s official manufacturing PMI for February, revealing activity levels deteriorated at the fastest pace in nearly three years. News that the summit between US President Donald Trump and North Korean leader Kim Jong Un concluded abruptly without any further progress on nuclear disarmament also did little to help the Aussie’s cause, raising renewed concern that progress in US-Sino trade negotiations could also suffer a similar fate. For what’s scheduled on the data front today, at 10am AEDT, CoreLogic will release its February Home Value Index for February with another chunky fall expected, albeit not a large as those seen in the previous two months. Outside of Australia, most interest will be on the China manufacturing PMI from IHS Markit that will arrive at 12.45pm AEDT. This survey is conducted by a private firm, rather than the Chinese government, and tends to focus more on smaller manufacturing firms. In the government’s PMI report for February released on Thursday, activity levels at smaller manufacturers were particularly weak.
AUDUSD
The Aussie fell on Friday, closing at 0.7079(-21 pips) against the greenback. The Aussie opened at 0.7102 today(Monday) as continued optimism towards trade negotiations between the US and China along with attempts from US President Donald Trump to bring the greenback lower, appear to be the main catalysts behind the sudden lift in thin trade. After closing last week at .7080, the AUD/USD currently trades at 0.7110, helped by a report from The Wall Street Journal suggesting that the US and China are close to agreeing a trade deal with a formal agreement likely be reached at a Xi-Trump summit scheduled for around March 27.“The news should be a positive for risk sentiment at the start of the new week,” said Rodrigo Catril, Senior FX Strategist at the National Australia Bank. While seemingly good news, similar reports have been heard before, an outcome that has seen financial markets largely price in an amicable agreement arriving between the two sides. The timing of the story is also impeccable, arriving in early Asian trade when very little volumes can lead to large price movements. Turning to the session ahead, the economic data calendar is busy in Australia with the release of further Q4 GDP inputs, along with building approvals data for January, at 11.30am AEDT. For the Q4 business indicators release, operating profits are expected to lift by 3% for the quarter, primarily reflecting the impact of stronger commodity prices for mining firms. Business inventories are also expected to edge up by 0.3%, an outcome that will add around 0.1 percentage points to quarterly GDP growth on an expenditure basis. Within the indicators report, measures on employee compensation will also be closely watched given increased uncertainty over the outlook for Australian household spending. Separately, the ABS will also release Australia’s building approvals report for January alongside the business indicators report. After tumbling in the prior two months, a small increase of 1.5% is expected. The latest Australian inflation gauge from the Melbourne Institute will also be of interest when released at 11am AEDT, as will ANZ job ads for February at 11.30am AEDT.
AUDUSD
The Aussie fell and closed lower on Monday, closing at 0.7086(- 12 pips) against the greenback. The Australian dollar rose modestly against most major crosses on Monday as renewed optimism towards US-Sino trade negations was offset by increased speculation that Australian economic growth remained sluggish in the December quarter, increasing the probability of an interest rate cut from the central bank of Australia (RBA). After beginning the week at .7080, the AUD/USD jumped in early Asian trade on a report from the Wall Street Journal that the United States and China were on the cusp of reaching a trade agreement, potentially as soon as the end of this month. The news saw the AUD/USD jump to as high as .7118 but the gains couldn’t be sustained, hinting that a trade deal has now all but been priced in by financial markets. Turning to the session ahead, the economic calendar will be dominated by services PMI reports from around the world along with the last of Australia’s Q4 GDP inputs. Moreover, government demand and Balance of Payments figures for the December quarter will both arrive at 11.30am AEDT. Within the latter, net exports are expected to slice 0.1 percentage points from Q4 GDP. As for government demand, Westpac economists are looking for a quarterly increase of 0.4%, an outcome that will add modestly to GDP. Before the GDP partials arrive, the latest Australian Performance of Services Index from the Ai Group, along with the weekly ANZ-Roy Morgan Australian consumer confidence index, will hit at 8.30am and 9.30am AEDT. Topping off a busy domestic events calendar, the RBA will also announce its March interest rate decision at 2.30pm AEDT. While no change is expected, traders will be monitoring for any signals on the likelihood for a rate cut given a continued deterioration in most Australian economic indicators.
AUDUSD
The Aussie fell further, continuing its bearish run, closing at 0.7081(-7 pips) against the greenback, as RBA maintained interest rates at 1.5%, which was widely expected. Yesterday, news also indicated that China has lowered its 2019 GDP growth target to a range of between 6% to 6.5%. Turning to the day ahead, the performance of the Australian dollar in Asia will likely be determined by two events. The first, a speech from RBA Governor Philip Lowe at 9.10am AEDT on “The Housing Market and the Economy” and, secondly, the release of Australia’s Q4 GDP report at 11.30am AEDT.“We see a risk that AUD/USD declines towards 0.7000 if Q4 Australian GDP is soft and Lowe strikes a cautious tone in his speech,” said Richard Grace, Chief Currency Strategist at the Commonwealth Bank. Despite the GDP being a lagging indicator as it provides us with information in the past, it still has significant implications for unemployment, inflation, investment, household incomes and government tax receipts in the future. After thriving in the first half of 2018, growth decelerated sharply in the September quarter, contributing the RBA abandoning its previously held view that the next move in Australia’s cash rate was likely to be up rather than down. Growth is expected to remain weak, or slow even further, in the December quarter.
AUDUSD
The Aussie tumbled on Wednesday, closing at 0.7028 (-58 pips) against the greenback. The Aussie fell to a new two months low as weak economic growth spurred speculation of a higher chance of rate cuts from the RBA in the year ahead. After starting the session at 0.7086, the came under selling pressure following the release of the Australia’s latest GDP report, revealing the economy grew by only 0.2% in the December Quarter. JP Morgan and Macquarie bank have also now move to forecast 50 basis points of rate cuts from the RBA this year. The weakness in the AUD/USD came despite news that the US trade deficit ballooned to the highest level in a decade in December, along with data showing hiring in the US private sector slowed sharply in February. The Aussie also lost ground against the euro, finding little support from speculation that the European Central Bank (ECB) may be about to introduce another round of low-interest loans to lenders to help support economic activity. Turning to the day ahead, it will be another busy day for traders with a raft of important Australian economic data releases on the way, continuing the deluge of information already received this week. At 8.30am AEDT, the Ai Group will release its Performance of Construction Index (PCI) for February. Given recent trends in construction and housing-related data, it’s unlikely to be good. Three hours later, the ABS will release Australian trade and retail sales figures for January. The latter will garner most market interest, and is the most likely catalyst to spark short-term volatility in the Aussie dollar
AUDUSD
The Aussie came under selling pressure on Thursday again, closing at 0.7018(-13 pips) against the greenback. According to the Australian Bureau of Statistics (ABS), sales grew by just 0.1% during the month in seasonally adjusted terms, coming in well under the modest 0.3% increase expected. Adding to the downbeat tone of the report, non-food sales — regarded as a better gauge on discretionary spending patterns — were flat, failing to bounce following a large 1.1% decline in December. That is a worry, suggesting that households are cutting back spending on the little luxuries in life. From a year earlier, total sales increased by 2.6%, the weakest result since May last year. For non-food sales, growth was even worse over the same period, increasing by just 1.7%. Not since October 2017 has annual non-food sales growth been this low. Looking through the monthly data, the ABS said the performance across various categories was “mixed”. Spending on food, at cafes, restaurant and takeaway outlets and “other” retailers grew by 0.3%, 0.3% and 0.7% respectively, offsetting falls of 2.1% and 0.3% respectively at department stores and at clothing, footwear and personal accessory retailers. Sales of household goods were flat, likely reflecting the downturn in Australia’s housing market and multi-decade lows in housing turnover. Turning to the day ahead, all attention today will be offshore with no major Australian economic data releases of note. In Asia, the main event will come from China with the release of trade data for February midway through the session. A trade surplus of $US26.4 billion is expected. It’s also worthwhile reminding at this point that the timing of Lunar New Year celebrations in China often creates unusual movements in Chinese data at this time of the year.
AUDUSD
The Aussie rose and corrected on Friday, closing at 0.7044(+22 pips) against the greenback. Having closed at .7045 on Friday, the AUD/USD currently trades at .7033, weighed down by the release of softer-than-expected Chinese monetary growth figures for February released over the weekend. The early decline has seen the AUD/USD give back much of gains from Friday, something that was sparked by a big slowdown in US jobs growth in February. US non-farm payrolls grew by just 20,000 last month, well below the 180,000 increase expected. Helping to limit the Aussie’s gains against the greenback, the US unemployment rate tumbled to 3.8% while average hourly earnings grew at the fastest year-ended pace since the GFC. While the latter two figures are arguably more important when it comes to the outlook for monetary policy settings from the US Federal Reserve, it was the payrolls figure that markets chose to focus on. That was despite clear evidence that weather likely contributed to the February result. “The [payrolls] number needed to be seen in context of an exceptional January print — revised up to 311,000 and weather-related hits to the likes of the construction sector,” said Ray Attrill, Head of FX Strategy at the National Australia Bank.
AUDUSD
The Aussie made gains on Monday, closing at 0.7071(+34 pips) against the greenback. After opening the session at .7045, the AUD/USD eased lower in early Asian trade, weighed down by weak Chinese inflation and monetary growth figures for February released over the weekend. After trying not once but twice to break below .7025, the AUD/USD began to reverse course late in the Asian session, helped by another late surge in Chinese stocks. That positive sentiment flowed through to European and North American trade, seeing the AUD/USD lift to as high as .7077 before easing marginally into the close. The release of stronger-than-expected US retail sales data for January did little to help the greenback’s cause, partially because of downward revisions to already weak retail spending in December. Instead, the improvement in risk appetite helped to lift other major currencies, including the Aussie dollar. Along with renewed optimism among traders, the US dollar was also weighed down by strong gains in the British pound ahead of a meaningful vote on Theresa May’s latest Brexit withdrawal agreement that will occur in the early hours of Wednesday morning on Australia’s eastern seaboard. On what is installed for the economic calendar for today, NAB will be releasing their Australian confidence survey that will arrive at 11:30 a.m. AEDT. “Given the RBA’s focus on the labour market, we will be closely watching the capacity utilisation sub index which leads the unemployment rate by around six months,” said Catril at the NAB.“Last month’s survey suggests unemployment could tick higher over the next six months to 5.5% from 5.0%.” Alongside the NAB survey, the ABS will also release housing finance data for January with the number of owner-occupier loans expected to decline by 2%, according to economists surveyed by Bloomberg.
GBPUSD
The British Pound rose strongly on Wednesday, closing at 1.3317(+254 pips). Catalyst for the strong pound for yesterday was due to the MP’s vote down on a no deal Brexit. Today’s action in British Parliament focused on the possibility of the United Kingdom departing the European Union without a Brexit deal. MPs voted on Caroline Spelman’s Amendment A and Damian Green’s Amendment F aiming to tailor the Prime Minister’s Brexit Withdrawal Agreement. PM Theresa May’s decisive defeat yesterday when the second meaningful vote failed to garner enough support to pass her renegotiated Brexit deal brought about today’s votes. Amendment A, which narrowly passed with 312 votes in favor and 308 against, rejects the UK leaving the EU without a Withdrawal Agreement and a Framework for the Future Relationship. On the other hand, Amendment F was voted down with 374 ‘noes’ and 164 ‘ayes’ which would have pushed for a 21-month transition period for the UK to prepare for a no-deal Brexit. UK PM spoke after the votes and mentioned that the options remain the same as before, including a “damaging” second referendum. At the same time, the media is reporting of resignations at the cabinet.
AUDUSD
The Aussie fell on Thursday, closing at 0.7066 (-19 pips) against the greenback. After opening the session at .7093, the AUD/USD reduced lower in Asian trade, adding to losses in the second half of the session from the announcement of Chinese industrial output, fixed asset investment and retail sales data that was either in line or slightly below market expectations. Reports that US President Donald Trump and Chinese President Xi Jinping were unlikely to sign off on a trade deal in the near-term also weighed on the Aussie, seeing the AUD/USD fall to as low as .7042 before gradually recovering in late European and North American trade.“Reports that a Trump-Xi meeting might not take place at least until late April, but which could be expanded to a full state visit rather than just a photo-op to sign a trade deal, were greeted with some disappointment,” said Ray Attrill, Head of FX Strategy at the National Australia Bank. “Since then, US Treasury Secretary Steve Mnuchin has been out on CNBC confirming that there will be no Trump-Xi meeting this month at least but that he is pleased with progress on trade talks.” The latter comments, along with remarks from Donald Trump that the US is “getting what we have to get” and getting it “relatively quickly” in relation to trade negotiations, may explain the Aussie’s modest recovery towards the close. Turning to the day ahead, it looks set to be a quiet session for markets with little on the economic calendar to speak of. There’s no data released in Australia. Elsewhere, Chinese new home prices is the only major release scheduled in Asia.
AUDUSD
The Aussie rode modestly on Friday, closing at 0.7084(+17 pips) against the greenback. Most of the uplift in the AUD/USD on Friday occurred as Chinese markets opened, seeing the AUD/USD rise back towards the .7100 level as reports emerged that officials from the US and China had made “substantive progress on trade talks” in recent weeks. That news, helping to lift risk appetite among investors, helped to keep the AUD/USD supported on dips during the session. Mixed US economic data also helped the Aussie’s cause, seeing US bond yields and the greenback pullback a touch. In terms of domestic economic conditions in Australia, traditionally March is a seasonally strong month for Australia’s housing market, 2019 is different. While auction clearance rates have lifted from record lows struck late last year, they remain well below the levels of a year ago. Those weekly declines extended the price falls in Sydney and Melbourne since the start of the month to 0.6% and 0.5% respectively. Prices have also fallen 0.2% in Brisbane and Adelaide since the end of February. Mirroring the weekly result, prices in Perth have been flat so far in March.
EURUSD
The Euro closed higher yesterday, closing at 1.1336(+17 pips) against the greenback. It was a relatively quiet start of the week for the FX market, with a scarce macroeconomic calendar exacerbated by low trading volumes. The EUR/USD pair, however, managed to advance to a fresh 2-week high of 1.3358 amid persistent dollar’s weakness in a sort of optimist financial environment. Equities surged in Asia, leading to a positive opening in Europe, while US Treasury yields remained near yearly lows. The positive mood eased ahead of Wall Street’s opening, with US indexes unable to post gains, struggling around their opening levels for most of the session. No macroeconomic releases were coming from the Union, while the US just unveiled the NAHB Housing Market Index for March, which matched its previous reading with 62, missing the market’s expectations of 63. The world, once again, gyrated around Brexit, as news that UK Commons’ speaker Bercow said that there wouldn’t be a third vote on May’s deal unless it brings some changes. This Tuesday, Germany will release the ZEW survey on Economic Sentiment, seen improving modestly in March. The prevision for the country is -11.3 vs. the previous -13.4, while for the whole Union, the sentiment is seen deteriorating to -18.7 vs. -16.6 in February. The US macroeconomic calendar will have nothing relevant to offer, with tension mounting ahead of the Federal Reserve meeting next Wednesday. The Euro will likely garner some attention from currency traders with the latest reading on economic sentiment. If the report is perceived by markets as positive, EURUSD may continue its recovery back to the upside. Alternatively, further deterioration of economic sentiment in the Eurozone could put renewed pressure on the bloc’s currency.
The Aussie fell by a margin on Tuesday, closing at 0.7086(-12 pips) against the greenback. Main catalyst for the fall was due to renewed concern about trade talks between the United States and China. After doing little in both Asian and European trade, the bulk of the Aussie’s move on Tuesday came late in the session, driven by a report from Bloomberg that Chinese officials are pushing back against US demands in trade talks. The report weighed on risk assets, including the Aussie dollar which has been highly sensitive to shifts in sentiment towards trade negotiations over recent months.“We are not too bothered by the news [given] it is normal negotiating behaviour,” said Joseph Capurso, Senior Currency Strategist at the Commonwealth Bank. “The negotiations could drag on for months and cap gains in Aussie dollar.” A separate report from the Wall Street Journal that trade talks between the two sides will resume next week in an attempt to strike a deal was largely overlooked by markets. Turning to the day ahead, the main event of interest will be the release of the US Fed’s interest rate decision, along with the FOMC’s latest economic forecasts. There’ll be plenty of attention on the FOMC’s dot plot for year-end and long-run Fed funds rate projections, along with any commentary on the outlook for the Fed’s balance sheet. The dot plot is widely expected to show a slower or no further policy tightening based compared to what was offered in December. The decision will arrive at 5am AEDT on Thursday morning, followed by a press conference from Fed Chair Jerome Powell. Before that key event arrives, other highlights today include a speech from RBA Assistant Governor Michelle Bullock at 11am AEDT. “[There’s] no tittle offered on the RBA website, but the invite in the event’s website has a rather punchy title of ‘Is it crunch time? The housing credit squeeze in a post royal commission economy?’,” said Catril at the NAB. If that is the topic of Bullock’s speech, it will receive plenty of attention given the housing market is one key area of uncertainty facing policymakers at the RBA.
AUDUSD
The Aussie rose on Monday, closing at 0.7111(+31 pips) against the greenback. The commodity pair trimmed Friday’s losses and settled a couple of pips above the 0.7100 figure, surging during the Asian session on comments from the Chinese premier Li Keqiang, who said that China had the ability to resist downward pressure on the economy to provide additional support to the currency, bringing relief to the Aussie. A strong advance in gold prices, with spot trading at fresh 1-month highs in the 1,322.00 area, also backed the commodity-linked currency. Australia didn’t publish macroeconomic data at the beginning of the week, and for this Tuesday, the only event scheduled is a speech from RBA’s Ellis. The pair advanced within range, stalling around a critical figure that so far can’t clearly break. The short term picture suggests that bulls’ conviction has already begun easing as, despite the price is now above all of its moving averages, technical indicators are losing upward momentum, with the RSI now gyrating south at around 53. The downside potential will remain limited as long as the price holds above 0.7055, the level to break to open doors for a steeper slide.