- The Australian dollar had a mixed start to the week, falling against most of the major crosses except the New Zealand dollar.
- Broader movements in currency markets were dictated by geopolitics and continued strength in crude oil prices.
- The economic events calendar picks up today, both in Australia and abroad.
The Australian dollar had a mixed start to the week, falling against most of the major crosses except the New Zealand dollar.
The scoreboard below as at 7am AEST tells the story.
AUD/USD 0.7525 , -0.0017 , -0.23%
AUD/JPY 82.5 , 0.03 , 0.04%
AUD/CNH 4.7682 , -0.007 , -0.15%
AUD/EUR 0.6308 , -0.0003 , -0.05%
AUD/GBP 0.5551 , -0.0017 , -0.31%
AUD/NZD 1.0882 , 0.006 , 0.55%
AUD/CAD 0.9634 , -0.0019 , -0.20%
With little in the way of fresh economic data to go off, the broader currency market movements were dictated by geopolitical and central bank headlines, said David de Garis, Economist at the National Australia Bank.
“It’s been an overnight night absent of key releases where a further lift in oil prices seems to have had the largest identifiable role in bond and equity markets,” he said in his morning note.
“The USD has regained a measure of support, though it’s been at the margin rather than specific US factors.”
Global bond yields rose during the session, helped by further strength in crude oil prices and hawkish commentary from central bank policymakers on both sides of the Atlantic.
“Bond yields were first supported in Europe and the US,” de Garis said.
“The German 10-year yield rose 5.2 basis points to 0.611% and US-10-year yields tipped over 3.00% again in the afternoon US session.”
The rise in US bond yields, coupled with continued geopolitical concerns in the Middle East, weighed upon the risk-sensitive Australian dollar, overriding strength in crude and iron ore markets.
As such, the AUD/USD pulled back from the multi-week high of .7566 struck on Friday.
After a quiet start to the week, the economic events calendar picks up a bit on Tuesday, providing some potential catalysts to spark short-term volatility for traders.
In Australia, RBA Deputy Governor Guy Debelle will have a busy day, delivering a speech on the outlook for the Australian economy at 9.10am AEST. He’ll foolow that up with another speech on ‘Interest Rate Benchmark Reform’ at 11.40am AEST.
Sandwiched in between Debelle’s speeches, the minutes of the RBA’s May monetary policy meeting will also arrive at 11.30am AEST.
Outside of Australia, China will also release monthly data on retail sales, industrial output and urban fixed asset investment for May at midday AEST.
Later in the session, data highlights include German and Eurozone Q1 GDP, French CPI, UK unemployment figures, including average worker earnings, along with Eurozone industrial production.
In the United States, retail sales, business inventories, NAHB home builder sentiment and Empire State manufacturing index will also be released.
On the central bank front, FOMC members Robert Kaplan and John Williams are scheduled to deliver speeches.
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