Australian Dollar Outlook - 25 June 2014
Bell FX Currency Outlook: The Australian dollar declined overnight as fighting in Iraq weighs on risk appetite.
Australia: The Australian dollar declined about ½ a cent against the USD overnight, mostly due to strength in the USD rather than domestic
weakness. Fighting in Iraq intensified and risk tone was dampened across global markets, with US equities falling, volatility rising and bond yields
easing.
The AUD and NZD were two of the worst performing G10 currencies overnight. Yesterday was quiet on the on the data front with only the ANZ Roy-Morgan Consumer Confidence released.
The figure was 105.7, better than the previous reading of 103.2, but this had no impact on the market. Today looks to be quiet again, with skilled vacancies the only economic data release for Australia. Also of note, at 1pm RBA Deputy Governor Lowe will moderate a panel on 'Strengthening the G20's Accountability and Effectiveness Conference.
Majors: As stated above, the USD was stronger last night, while equities fell despite some good housing market data. New home sales beat
expectations to rise 504k for the month (440k expected), up from 425k last month.
This data, along with other recent improvements in homebuilder sentiment and existing home sales suggests that momentum in the housing market is improving. Also last night US consumer confidence surprised to the upside, coming out at 85.2, better than 83.4 expected.
The GBP underperformed last night as Bank of England Governor Carney told a hearing of Parliament's Treasury Committee on the central bank's
May Inflation Report that recent wage data has been softer than the BOE anticipated and that there's scope to absorb more slack before rates can
increase. This tone was more dovish than recent statement from the BoE and dampened expectations on a near term rate hike.
The EUR remains flat against the greenback despite worse than expected German IFO business conditions/expectations. US data is likely to be the focus tonight, with GDP, durable goods, and personal consumption data all being released.
Economic Calendar
25 JUN AU Skilled Vacancies MoM
US Durable Goods Orders
US MARKIT US SERVICES PMI