|

Aussie steady despite weak trade data

Australia’s trade surplus narrowed for a second consecutive month in August, dropping to the lowest in three months. A 3% contraction in exports was the main culprit for the deterioration while imports registered zero growth. The surplus slid to A$5.9 billion from A$7.3 billion, with analysts’ expectations at A$6.0 billion.

The Australian dollar was steady despite the weaker data, rising 0.03% to 0.6709 versus the US dollar and 0.01% to 71.84 versus the Japanese yen. AUD/USD looks poised for a second consecutive daily gain after touching a 10-1/2 year low yesterday.

AUD/USD Daily Chart

Source: OANDA fxTrade

 BOJ needs to keep on easing

Bank of Japan Policy Board member Yukitoshi Funo said in a speech this morning that the global economy is slowing and downside risks are increasing. He noted it was vital to keep rates low to maintain a positive output gap and, if risks are seen in achieving its price target, the BOJ will need to prevent them from materializing. Easing steps include rate cuts, boosting asset purchases and further expansion of the monetary base.

The Japanese yen showed little response to the comments, instead continuing its bid tone on the back of safe haven purchases. USD/JPY fell 0.08% to 107.10, GBP/JPY slid 0.08% to 131.72 while AUD/JPY edged 0.04% lower to 71.85. The USD/JPY 55-day moving average is at 107.13.

USD/JPY Daily Chart

Source: OANDA fxTrade

EU stands ready to extend Brexit

The UK’s Times reports that the EU is ready to bypass UK PM Johnson to grant an extension to Article 50 and the Brexit deadline. The paper notes that, under the Benn Act, the UK government is required to seek a Brexit extension to the Article 50 process if PM Johnson does not have parliamentary approval for a new agreement, or the support of MPs for a no-deal Brexit, by October 19. EU leaders are said to be on standby for an emergency Brexit summit during the last week of this month if UK Parliament does not pass anew withdrawal agreement in the next two weeks.

The pound has been relatively stable this week, with closing rates versus the US dollar in a tight 1.2295-1.2305 range so far. Today the FX pair is little changed at 1.2299. The 55-day moving average is at 1.2273 and has held on a closing basis since September 6.

Services PMIs on tap

Today it’s the turn of the services PMIs around the globe for September, with final readings from Markit for Germany, the Euro-zone, the UK and the US. In addition, we see the ISM equivalent, with estimates suggesting a dip to 55.1 from 56.4 in August. In addition we have Euro-zone retail sales for August on tap, a rebound to +0.3% m/m from -0.6% is expected, and US factory orders for the same month. Forecasts suggest a 0.2% contraction after a 1.4% expansion the previous month.

Author

Andrew Robinson

Andrew Robinson

MarketPulse

A seasoned professional with more than 30 years’ experience in foreign exchange, interest rates and commodities, Andrew Robinson is a senior market analyst with OANDA, responsible for providing timely and relevant market commentar

More from Andrew Robinson
Share:

Editor's Picks

AUD/USD keeps the red near 0.6950 after weak Aussie jobs data

AUD/USD holds losses near 0.6950 on disappointing Australian jobs data, extending the previous day's retracement slide from the monthly high and hitting a fresh weekly low during Thursday’s Asian session. Meanwhile, declining US bond yields drag the US Dollar away from the April 2025 high, touched after Wednesday's hot US CPI, helping limit losses for the currency pair.

USD/JPY slides back below 158.00 as USD reverses post-CPI gains

USD/JPY extends the previous day's pullback from a three-week high, attracting follow-through selling and sliding below 158.00 during Thursday's Asian session. Traders remain on high alert amid speculation that authorities will step in to prop up the Japanese Yen. The US Dollar, meanwhile, reverses Wednesday's hot CPI-led gains to April 2025 highs as US bond yields retreat on China bond-buying talk, further pressuring the pair.

Gold sticks to gains below $4,150 on weak USD; bulls seem hesitant amid Fed hike bets

Gold clings to modest intraday gains through the early European session amid a broadly weaker US Dollar, snapping a three-day losing streak to a one-week low set on Wednesday. The initial aggressive market reaction to hot US consumer inflation figures faded quickly amid expectations that the Fed may not rush to raise interest rates immediately. This led to a further decline in US bond yields, prompting some follow-through USD profit-taking and supporting the non-yielding bullion.

Bitcoin, XRP analyst sentiment jumps as Solana bulls hit 91%: CryptoQuant

Analyst sentiment on Bitcoin, Ethereum, Solana, BNB and XRP has flipped bullish since July, as the top five cryptocurrencies recovered faster and more strongly than during the 2022-2023 market phase, according to CryptoQuant.

US Sept Retail Sales and PPI in focus along with corporate earnings
Asia market update: Bond traders ignore US CPI and focus on equity weakness and AI-credit concerns ahead of TSMC earnings; Kospi circuit breaker triggered for the first time since Jul; CHF and JPY rise on safe-haven demand; US Sept Retail Sales & PPI in focus along with corporate earnings. - Chinese shipping firms collapse amid capacity concerns.
Has Bitcoin really escaped the macro forces it was built to fight?
Over 17 years ago, Satoshi Nakamoto designed Bitcoin (BTC) on the back of a global financial crisis as an alternative to the global monetary system outside the control of central banks, governments and traditional intermediaries. This raises a key question: has Bitcoin really become independent of the macroeconomic forces it was built to challenge?