Overnight the Australian Dollar continued its plummet against the majors, falling over half a percent against the EUR, USD and GBP. It did however, experience the opposite momentum in relation to the New Zealand Dollar.
The New Zealand Dollar felt the full force of comments made by the New Zealand Prime Minister, John Key, who reiterated the same viewpoint on the NZD as the Reserve Bank of New Zealand did, by stating that the NZD is currently over-valued. This pushed the AUD to NZD exchange rate back towards the highs of 2014 that we were seeing in early September. If the Aussies rally against the NZD continues, we are likely to see new highs for 2014 hit later this week.
The German Consumer Price Index figure was announced last night and the annualised result was slightly above the forecast, coming in at 0.8%. As the largest economy in the Euro-Zone, this provides economists with an insight into the Euro-Zone CPI figure which will be this released this evening. The Euro-Zone has significantly low inflation. This combined with the recent interest rate cuts made by the European Central Bank have lead to a continued trend of a devalued Euro.
The US economy had a number of economic releases overnight, commencing with the percentage change to Personal Income and Personal Spending for August, both of which were an improvement to the previous month’s result. US Pending Home Sales was announced following the reports on income and expenditure and the printed figure was less than expected, however, investors continued pouring funds into the Greenback and we saw the AUD reach its lowest levels against the US Dollar in approximately 8 months.
Today, only low-tier data is expected out of Australia in the form of the ANZ Roy Morgan Consumer Confidence Index and Private Sector Credit. Tomorrow’s release of the Australian Retail Sales, the Commodity Index and the Performance of Manufacturing Index is likely to play a greater role in swaying the value of the AUD. Chinese Manufacturing PMI is due out tomorrow and is likely to move the Australian Dollar if the printed figure is above 51.0.
The 2 North American economies will be watched carefully tonight as Canada releases their annualised Gross Domestic Product Figure and the US report on consumer sentiment in the form of the Consumer Confidence Index. A weaker than anticipated figured for each will likely provide the Australian Dollar with some temporary legs to make gains on the ‘Loonie’ and the ‘Greenback’, whilst a better than expected figure out of the North American economies will likely cause the AUD to keep falling towards the lowest exchange rates seen since February of this year.