S&P 500 — US Large Cap Index
FTSE 100 — UK Blue Chips
Euro Stoxx 50 — Eurozone Leaders
DAX 40 — German Equities
CAC 40 — French Market Index
Nikkei 225 — Japan Benchmark
Hang Seng — Hong Kong Index
Shanghai Composite — China Mainland
ASX 200 — Australian Market
TSX Composite — Canada Index
Nifty 50 — India Large Cap
STI Index — Singapore Market
KOSPI — South Korea Index
Bovespa — Brazil Equities
JSE Top 40 — South Africa Index
IPC Index — Mexico Market
- AUD/USD edges down from three-week lows at 0.7064 but maintains its near-term positive bias intact.
- Australian Trade Balance showed an unexpected surplus in June as commodity exports surged.
- The US Dollar is failing to find support from macroeconomic data this week.
The Australian Dollar (AUD) posts moderate losses against the US Dollar (USD) on Thursday, retreating to the 0.7040 area from three-week highs at 0.7064 on Wednesday. The pair, however, maintains its near-term bullish structure, with investors biding their time ahead of Friday’s key US Nonfarm payrolls report and awaiting clarity on the US-Iran negotiations.
Data from Australia released on Thursday was supportive, as June’s Trade Balance revealed an unexpected surplus, with commodity exports jumping to four-year highs. Australia’s foreign trade posted an AUD 1.929 million surplus, against expectations of an AUD 1.1 million deficit, and following a downwardly revised deficit of AUD 2.367 million in May.
In the US, on the contrary, the ADP Employment Change disappointed on Wednesday, showing 44K net employment creation in July, less than half of June’s 98K and well below the 70K market consensus. Later on Wednesday, the US ISM Services Purchasing Managers’ Index showed healthy growth, but also short of the market expectations, with prices jumping and employment falling.
Dollar bulls remain capped as markets eye US payrolls
ING’s FX strategists highlight that “news of a deal between Iran and Oman to open a safe shipping route in the Strait of Hormuz has kept the FX market in risk-on mode, favouring a rotation from the Dollar to higher-beta currencies.” However, they stress that “G10 moves have been contained this week, likely because tomorrow’s US payrolls report remains the key catalyst and a notoriously difficult one to predict,” keeping traders wary of aggressive positioning.
ING also points out that “markets are also waiting for the next headlines on US-Iran negotiations.” In their view, “there appears to be little pessimism left in FX markets, and positive headlines on that topic may not generate sustainable USD weakness.” With “payrolls looming tomorrow,” the bank expects that “a wait-and-see stance may keep volatility contained and the Dollar broadly range-bound.”
