AUD - Australian Dollar
The Australian dollar opens higher this morning, trading above the key 0.7600 handle and is currently oscillating around the 0.7620 mark as we head into today’s session. Thursday’s session saw the defensive USD fall to a three-year low, as the S&P500 rallied to fresh record highs due to signs of progress in US stimulus negotiations. Reports indicate that we could see the 900bn package agreed before the weekend.
AUD/USD did touch highs of 0.7640 during trade, making a fresh 2 and a half year high in the process. Given we also saw the New Zealand dollar rise from 0.7130 to 0.7171, the AUD/NZD cross traded sideways between 1.0640 and 1.0670 on the day.
We look set for a quiet day on the data front with nothing major on the domestic docket. We do get some business and consumer confidence data out of New Zealand as well as November trade balance data. Later in the session we expect to see a rise in the German IFO business climate index as lockdowns once again become the norm. Finally, the session will be rounded out by UK retail sales data for November and some second tier consumer sentiment survey data.
Given recent moves, the first line of resistance is seen at the intraday high of 0.7640 before the June 2018 high of 0.7675.
As we touched on above, Thursday’s session saw the S&P500 rally to fresh all time highs and the USD index fall 0.8% to 3 year lows. The risk on mood was due to reports that a US fiscal stimulus deal was expected before the weekend and news that a UK-EU trade deal was also getting closer. The positive risk sentiment compounded the downward pressure on the USD and aided riskier currencies, such as the AUD and NZD, which both made fresh highs.
With the likelihood of a UK-EU trade deal rising and the ECB keeping interest rates on hold overnight, the GBP was able to cross the key 1.36 handle against the USD. EUR was also carried higher, rising from 1.2225 to 1.2271, representing its highest level since April 2018.
And finally taking a quick look at how global commodity markets traded overnight, crude oil futures rose 0.4%, iron ore rose 1.6% and gold also rose 1% on the day.
0.7500 - 0.7700 ▲AUD/EUR:
0.6180 - 0.6250 ▲GBP/AUD:
1.7600– 1.8100 ▲AUD/NZD:
1.0600 - 1.0700 ▲AUD/CAD:
0.9580 - 0.9800 ▲