AUDUSD Day’s Range: 0. 72179 – 0.71486
Investors see hope for the Australian economy in the coming years. Prime Minister Morrison plans to remove the strict lockdowns once the vaccination level reaches 70% to 80% and focuses are shifting from cases to vaccination rate and hospitalization. AUDUSD started to appreciate despite the extension lockdown in Tasmania. China reported no new Covid-19 Delta cases for the first time since July, suggesting a good sign for the recovery and growth of the Chinese economy.
The PMI data from different counties did not significantly impact the market as the market is still focusing on the outbreaks of COVID-19 Delta variant and the restrictions. The U.S. Food and Drug Admission(FDA) has given full approval to Pfizer’s COVID-19 vaccine, lifting market confidence.
The increasing COVID-19 delta cases, slower growth, and rising risk of default in China have led to a rally in USDCNY, but at the same time, these factors are combining to keep the yuan in a tight trading range, cap how high the USD can go. A sharp rise in dollar-yuan would life the dollar index DXY as the yuan has a heavy weighting in it. There might be a spillover effect from other developing currencies.
The U.S. business activity growth slowed for a third straight month in August due to capacity constraints, supply shortage, and the spread of the COVID-19 delta variant. The HIS Markit survey’s flash service sector PMI fell to 55.2, below the expectation of 59.1.
Data:
- AU August Flash Manufacturing PMI: 51.7 v. 55.9 prev.
- AU August Flash Services PMI : 43.3 v. 44.2 prev.
- JP August Flash Manufacturing PMI : 52.4 v. 52.1 exp.
- EU August German Flash Manufacturing PMI: 62.7. v. 65.1 exp.
- EU August German Flash Services PMI: 61.5. v. 61.0 exp.
- EU August Flash Manufacturing PMI: 61.5 v. 62.0 exp.
- EU August Flash Services PMI : 59.7 v. 59.6 exp.
- UK August Flash Manufacturing PMI : 60.1 v. 59.5 exp.
- UK August Flash Services PMI 55.5 v. 59.0 exp.
- US August Flash Manufacturing PMI : 61.2 v. 62.4 exp.
- US August Flash Services PMI : 55.2 v. 59.1 exp.
AUDUSD Hourly Chart:
Major moves in the market:
Stocks
- The S&P 500 rose 0.9% as of 4:01 p.m. New York time
- The Nasdaq 100 rose 1.5%
- The Dow Jones Industrial Average rose 0.6%
- The MSCI World index rose 1.1%
Currencies
- The Bloomberg Dollar Spot Index fell 0.5%
- The euro rose 0.4% to $1.1748
- The British pound rose 0.8% to $1.3731
- The Japanese yen rose 0.1% to 109.67 per dollar
Bonds
- The yield on 10-year Treasuries was little changed at 1.25%
- Germany’s 10-year yield advanced one basis point to -0.48%
- Britain’s 10-year yield advanced one basis point to 0.53%
Commodities
- West Texas Intermediate crude rose 5.3% to $65.44 a barrel
- Gold futures rose 1.3% to $1,807.40 an ounce
Upcoming data:
- NZ Q2 Core Retail Sales & H/line Retail Sales : 2.1% & 2.4% exp.
- EU Q2 German Final GDP : 1.5% exp.
- US July New Home Sales : 698K exp.
- US August Richmond Manufacturing Index : 25 exp.
