After a brief foray above the 77 cent level in Asia, and several looks at this level again overnight, the Australian dollar is almost unchanged from where it began the trading week this morning, continuing to oscillate in a thin trading range ahead of Donald Trump’s first appearance before the US Congress on Tuesday.
Here’s the Aussie dollar scoreboard as at 7.55am AEDT.
- AUD/USD 0.7677 , 0.0008 , 0.10%
- AUD/JPY 86.52 , 0.47 , 0.55%
- AUD/CNH 5.2677 , 0.0118 , 0.22%
- AUD/EUR 0.7249 , -0.0011 , -0.15%
- AUD/GBP 0.6170 , 0.0019 , 0.31%
- AUD/NZD 1.0664 , 0.001 , 0.09%
After popping higher in Asia, assisted in part by another gravity-defying surge in Chinese commodity futures, the AUD/USD eased lower in the second half of the session, undermined by remarks from Donald Trump to a group of governors overnight that he will make a “big statement” about fixing roads and bridges in his address to Congress.
“I’m going to have a big statement tomorrow night on infrastructure,” Trump said.
That helped to lift US bond yields, and saw the odds of a rate hike from the US Federal Reserve lift to 50%, underpinning gains in the US dollar.
It was also enough to keep a lid on gains in the Australian dollar.
While trading is likely to be muted ahead of Trump’s speech, there’s plenty on the economic docket in Asia to keep traders busy on Tuesday, including the final data inputs before Wednesday’s Australian Q4 GDP report.
The ABS will release government spending and balance of payment figures for the December quarter, the latter including net export contribution to quarterly GDP growth.
According to David de Garis, director of economics at the National Australia Bank, net exports is likely to make a modest contribution to GDP while government spending likely to come in flat.
“NAB estimates that after a 0.2% point drag on growth in Q3, net exports returned to +0.2% in Q4,” he said on Tuesday morning. “NAB’s model 0.9% GDP growth embodies flat government spending in Q4.”
Alongside the GDP partials, the RBA will also release private sector credit figures for January, with most attention likely to fall on the split between owner-occupier and investor housing credit growth.
Though not a significant market mover in the past, RBA governor Philip Lowe, after seeing it surge by 0.8% in December, said that supervision of lenders would likely be tightened further should investor credit growth keep accelerating after declining in the early parts of last year.
Continued strength in the Sydney and Melbourne housing markets has been cited as one factor that has made the RBA reluctant to ease interest rates in recent months.
The GDP partials and RBA credit figures will both be released at 11.30am AEDT.
Markets will also receive the weekly ANZ-Roy Morgan Australian consumer confidence index along with industrial production and retail sales figures from Japan during today’s session.
Later in the session, updated French and US GDP figures for the December quarter, inflation numbers out of Italy and France, along with consumer confidence, house prices, Chicago PMI and the Richmond Fed manufacturing index, are also scheduled for release.