In a reversal of the pattern of recent days, the AUD and NZD were amongst the weakest performers over the past 24-hours. The EUR is a little stronger versus the USD.
Markets were fairly mixed overnight. Equities were soggy early in the night but both the Euro Stoxx50 and S&P500 have clawed themselves back to only modest losses. Meanwhile commodities, including oil, are modestly higher.
There was choppy trading in the EUR/USD overnight. But overall, despite a disappointing German ZEW survey of the economy, the EUR/USD sits a little higher this morning.
The survey showed softer current conditions and expectations, impacted by the VW emissions scandal and slower growth in emerging markets. It warns that the German economic cycle may already have passed its peak. However the EUR/USD has remained fairly resilient, trading at 1.1390 currently.
The GBP/USD also experienced some volatility overnight. It pushed higher early in the evening ahead of the release of UK Sept CPI. However, when the core measure came in below expectation, at 1.0%y/y, the GBP/USD traded lower. From intra-night highs above 1.5380 it now trades at 1.5240.
The AUD/USD was already gently declining for much of the day yesterday, but gapped lower on the release of China trade data.
Although China’s trade balance was larger than expected, this was principally due to weaker than expected imports. This was not welcome news either for the AUD or the NZD.
The AUD/USD has subsequently continued its downward momentum to trade at 0.7270 at present.
The NZD/USD also touched its afternoon’s lows, below 0.6660, soon after the China data release. Its attempts to rally overnight did not come to much.
The NZD/USD trades around 0.6670 this morning. Near-term resistance remains at 0.6740. Early this morning the market will be focused on the RBNZ Governor’s scheduled speech.
Tonight, US retails sales data may help set the tone toward the USD.
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Kymberly Martin is on the BNZ Research team. All its research is available here.