Welcome to our daily market update, where we help keep you informed on the latest happenings in the world of FX.
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KEY DATA TO WATCH
| Australia – | – | Home Loans (MoM) | |||
| China | – | Exports (YoY) (Dec) | |||
| Imports (YoY) (Dec) | |||||
| Trade Balance (USD) (Dec) | |||||
| United Kingdom | – | GDP | |||
| Industrial Production (MoM) (Nov) | |||||
| Manufacturing Production (MoM) (Nov) | |||||
| Trade Balance (Nov) | |||||
| Trade Balance Non-EU (Nov) | |||||
| Eurozone | – | Industrial Production (MoM) (Nov) | |||
| Trade Balance (Nov) | |||||
MACRO REPORT
Industrial Production (MoM) (Nov)Trade Balance (Nov)The Aussie Dollar gained significant ground overnight against the US Dollar as it aimed to test the 0.70 handle. The AUD/USD pair hit a high of 0.6985 aided by a reversal of China’s shadow ban on Australian resources and upbeat domestic data. Although, most momentum was gained following US inflation data reporting its lowest in more than a year.
The US Bureau of Labor Statistics reported US Headline CPI easing from multi-decade highs to rise at an annual pace of 6.5% in December versus a prior reading of 7.1%. On a monthly basis, CPI fell by 0.1% following November’s increase of 0.1%. As expected, the core rate, which excludes volatile food and energy prices, eased to 5.7% on a yearly basis from the previous month’s print of 6.0%, and finally, Core CPI (MoM) rose by 0.3%. With US price pressures finally on the decline, data is supportive of a slower pace of rate hikes for the Fed, something the markets have been anticipating since the last quarter of 2022.
As a knee-jerk reaction, the US dollar rose slightly but failed to gain momentum. The US Dollar Index (DXY) is down -0.90%, trading at 102.2570 at the latest. As of writing, the AUD/USD pair is trading 0.6962, up 0.78%. On US CPI news, Wall Street seesawed until finally turning to the upside, with the S&P 500, NASDAQ and Dow Jones rising 0.34%, 0.64% and 0.64%, respectively.
It is also worth noting that Australia’s balance came in better than expectations at a surplus of AUD 13.201 billion, an upward revision from a prior reading of AUD 12.217 billion.
Next of relevance, China will release its trade balance data, followed by UK GDP for November.