Bell FX Currency Outlook: The Australian Dollar has opened slightly firmer this morning, despite offshore concerns about escalating tensions between Ukraine and Russia.
Australia: The AUD spent most of yesterday contained within a tight range, trading around USD0.8900. Overnight, the AUD remained pretty range bound despite rising tensions between Russia and the Ukraine. The AUD traded as high as 0.8947 before drifting lower but still mostly maintaining its position above the USD0.8900 level.
In Australia today we have the balance of payments being released alongside building approvals and the RBA March Meeting. The market is forecasting a deficit of AUD12.7bn, while building approvals are expected to remain volatile around a high annual rate. The market is expecting no change to the RBA cash rate and little change to their accompanying statement.
Majors: As mentioned above escalating tensions between Russia and the Ukraine let to a marked risk-off sentiment in the financial markets overnight. The gold price was up by around 2% and the USD and the JPY were supported by safe haven demand. European and US equity markets declined sharply, led by a 12% decline in the Russian exchange. The USD was appreciated against most major currencies, however the AUD and the NZD remained fairly resilient.
There was some good news data flow out the US with ISM manufacturing survey bouncing back in February to 53.2 from 51.3 in January. While the European PMI Manufacturing was 0.2ppts higher to 53.2.
In the UK the PMI Manufacturing printed in line with market expectations, increasing to 56.9 from 56.6 in January.
Offshore tonight will be pretty quiet in terms of data so again global events are likely to dominate direction.
- 04 MAR AU RBA Cash Rate Target
- AU Building Approvals MoM
- AU Net Exports of GDP
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