- The Australian dollar rose strongly on Friday as risk appetite improved noticeably.
- The economic data calendar is incredibly quiet on Monday. Most US markets will be shut for the Presidents Day holiday.
- Australia will see some big data releases later in the week, including wage and unemployment data.
The Australian dollar rose strongly on Friday, helped by a noticeable lift in investor sentiment during the session.
It’s gains have largely maintained in early Asian trade in Monday.
Here’s the scoreboard at 8am in Sydney.
AUD/USD 0.7136 , -0.0003 , -0.04%
AUD/JPY 78.8 , 0.03 , 0.04%
AUD/CNH 4.8304 , 0.0041 , 0.08%
AUD/EUR 0.6314 , -0.0003 , -0.05%
AUD/GBP 0.5524 , -0.0006 , -0.11%
AUD/NZD 1.0402 , 0.0021 , 0.20%
AUD/CAD 0.9455 , 0.001 , 0.11%
After opening Friday’s session at .7105, the AUD/USD fell to as low as .7077 following the release of weak Chinese consumer and producer price inflation data for January.
However, thanks to a combination of renewed optimism over US-Sino trade negotiations, dovish commentary from central bank officials from the US Fed and ECB, weak US trade price data and strong growth in aggregate financing in China during January helping to boost near-term sentiment on the outlook for the Chinese economy, the AUD/USD reversed those losses and more in the latter half of the session, eventually seeing it close at .7139, the highest level since early February.
“With risk sentiment back, commodity currencies outperformed alongside British pound, while US and European equities made decent gains,” said David de Garis, Economist at the National Australian Bank.
“The AUD, NZD, and CAD all made gains of between 0.4-0.6% since from the end of Asian trade.”
Turning to the day ahead, it will be a quiet one for traders with most of the big market moving events, including from Australia, all arriving in the latter parts of the week.
Japanese core machine orders for December and Singaporean non-oil exports for January are the headline acts in Asia on Monday.
Given the dearth of new economic information, the performance of Chinese markets, especially the Chinese yuan, may prove to be influential on the Aussie dollar.
There is very little on the economic data docket to interest traders in the second half of the session, partially because of the Presidents Day holiday in the United States that will see several markets, including stocks, remain closed until Tuesday.
The economic data calendar will gradually pickup as the week progresses in Australia with the minutes of the RBA’s February monetary policy meeting, wage and unemployment data all set to be released.
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