AUD - Australian Dollar
Thursday’s session saw the Australian dollar rise from 0.7085 to 0.7125, as markets adopted a positive mood. Although there was no progress made on the US fiscal stimulus package, the Australian dollar was aided by positive risk sentiment with the S&P500 rising 0.5% and positive US economic data was digested by markets. The New Zealand dollar benefited more than the Australian dollar, pushing the AUD/NZD cross down below 1.0650, its lowest level since July.
With nothing on the domestic docket for today, investors will be looking towards New Zealand’s CPI read for Q3, which is expected to show an increase of close to 1%. The bulk of the rise is expected to be resultant of higher petrol prices and seasonal factors. Keeping with the inflation theme, attention then shifts to Japanese CPI data for September, which is expected to be on the softer side. A raft of PMI’s out of Japan, Europe, the UK and the US will also be dispatched before the session is rounded out by UK retail sales data for September.
With solid AUD/USD support at 0.7000, any positive surprises today could see initial resistance tested at 0.7200. A break through at this level opens up moves to the October high of 0.7240 and beyond.
As we alluded to above, markets were in a slightly risk on move over night. Despite this, the safe haven USD index was up 0.3% on the day as positive US economic data bolstered the world's reserve currency. The US dollar was also aided by euro weakness with EUR/USD falling from 1.1865 to 1.1812 during trade. The GBP also fell from 1.3150 to 1.3070. The haven JPY was also under pressure, allowing USD/JPY to rise from 104.50 to 104.88.
The key focus of global markets heading into the session ahead will be the raft of PMI’s due to be released as well as a couple of inflation updates out of New Zealand and Japan. These will continue to be watched as a leading indicator of the global economic recovery.
0.7030 - 0.7220 ▲AUD/EUR:
0.5925 - 0.6095 ▲GBP/AUD:
1.8250– 1.8470 ▼AUD/NZD:
1.0600 - 1.0700 ▼AUD/CAD:
0.9320 - 0.9360 ▲