By Kymberly Martin
After some initial volatility, the USD index strengthened against a weaker EUR following the ECB’s announcement early this morning. The AUD has been the weakest performer over the past 24-hours.
The EUR/USD briefly spurted higher this morning after the ECB announced no formal changes to its monetary policy. It soon reversed the move, and more, as President Draghi, in his comments, remained purposely non-committal about the ECB’s future plans. The EUR/USD has traded from early morning highs near 1.1040 to sit at 1.0940 currently.
The USD index traded in mirror-image, strengthening against most of its peers in the early hours of this morning. It trades at 98.20 currently, its highest level since mid-March.
Yesterday afternoon the AUD/USD initially gapped lower on the release of the AU employment report. September offered up another weaker than expected report in trend terms, though our NAB colleagues see considerable uncertainty with the veracity of many of the figures. That aside, the trends are not likely to allay the RBA’s fears about the momentum of the labour market.
The market has increased pricing of further RBA cuts. It is likely to price in greater risk of further RBA action if these employment trends are not reversed in the following months. From 0.7730 yesterday morning the AUD/USD fell to 0.7700 on the data release. Downward momentum continued overnight, assisted by weaker global commodity prices and USD strength. The AUD/USD now trades below 0.7640.
The NZD/USD has had a rocky 24-hours. The NZD/AUD cross surged higher following the release of the AU employment report. This resulted in the NZD/USD briefly spiking above 0.7260. Subsequently it has drifted lower, with downward momentum exacerbated by early morning USD strength. The NZD/USD now trades at 0.7200.
Overnight, the NZD/AUD cross consolidated yesterday’s gain. It now trades at 0.9430.
This morning NZ net migration figures will be released. These remain of great interest given strong net migration remains a key contributor to GDP growth and housing demand. Last month’s figures were below the all-time peaks of late last year, though still elevated.
Get our daily currency email by signing up here:
Daily exchange rates
Select chart tabs
BNZ Markets research is available here.
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.