The Australian dollar is next to nothing, except against the Kiwi

Photo by Hannah Peters/Getty Images

The Australian dollar eased its way into the new trading week by doing next to nothing, mirroring the broader theme seen across financial markets on Monday.

Very little is happening anywhere as the northern hemisphere’s summer doldrums roll on.

Here’s the Aussie dollar scoreboard just before 7am AEST.

AUD/USD 0.7910 , -0.0012 , -0.15%
AUD/JPY 87.59 , 0.00 , 0.00%
AUD/CNH 5.3237 , -0.0065 , -0.12%
AUD/EUR 0.6706 , -0.0015 , -0.22%
AUD/GBP 0.6067 , -0.0002 , -0.03%
AUD/NZD 1.0737 , 0.0058 , 0.54%
AUD/CAD 1.0032 , 0.0007 , 0.07%

While the Aussie did very little against most major crosses, it did rally hard against the New Zealand dollar, adding over 0.5% for the session.

Ray Attrill, head of FX strategy at the National Australia Bank, said that the Kiwi was undermined by a number of factors on Monday.

“Far and away the biggest FX move since the start of the week has been the NZD, off 0.67% and now almost two cents back from its late July highs above 0.7550,” he said in his Tuesday morning note.

Attrill said that record-long New Zealand dollar speculative positioning in the latest US CFTC data made the Kiwi vulnerable to any rebound in the US dollar, something that duly arrived following the release of July’s non-farm payrolls report on Friday.

That saw profit-taking kick in on Monday, exacerbated by a technical break of the uptrend in the NZD/USD established since mid-May and falling New Zealand inflation expectations in data released yesterday.

“While yesterday’s drop in 2-year inflation expectations, to 2.09% from 2.17%, looked to have had some negative impact this was hardly surprising after the reported drop in CPI in Q2,” said Attrill.

Outside of the rally against the Kiwi, the movements in the AUD/USD were tiny, as seen in the hourly chart below.

AUD/USD Hourly Chart

However, after a slow start to the week, the economic calendar in Asia goes up a cog on Tuesday, offering hope to traders craving some short-term market volatility.

In Australia, the latest weekly ANZ-Roy Morgan consumer confidence report will be released at 9.30am AEST. That will be followed two hours later by the latest business confidence report from the National Australia Bank for July.

While the headline confidence and conditions indices will garner plenty of attention, there’s likely to be plenty of interest on the survey’s employment subindex given the increased focus on Australian labour market conditions by the Reserve Bank of Australia.

Outside of Australia, the other big event across the region today comes from China with the release of international trade figures for July, a report that has had a tendency to come in ahead of market expectation in recent months.

“Expectations are for exports to have risen by 11% year-on-year in dollar terms from 11.8% in June and imports to be up 18% versus 17.2% last time,” says Attrill. “The overall trade balance is seen at $45.2 billion up from $42.8 billion in June. That would do AUD no harm.”

There is no set time for the trade report, although it tends to arrive sometime after midday AEST.

Later in the session, highlights include the release of trade figures from Germany and France along with the latest NFIB small business optimism and JOLTS job openings surveys from the United States.