The AUDUSD opens at 0.6761 (mid-rate) and the NZDUSD opens at 0.6331 (mid-rate) this morning.
The AUD is the strongest performing of the G10 currencies after the RBA held its key policy rate at a record low of 1.0% but delivered a statement which was deemed to be less dovish than the market was anticipating.
The AUD had weakened ahead of the meeting as investors repositioned their books for the possibility of a rate cut after Prime Minister Scott Morrison said he expected today’s GDP data to show the June quarter had been "very difficult." "We're very aware of the challenges that Australia was facing in the global economy when we prepared this year's budget. All of this was part of this year's budget in the full knowledge that we would be facing a very difficult quarter," he said.
This morning’s US data releases were on the soft side with the ISM reporting its purchasing managers index fell to 49.1 in August after dipping to 51.2 in July. It’s the first time in three years that manufacturing activity has contracted.
US construction spending inched up by 0.1% to an annual rate of $1.289 trillion in July after sliding by 0.7% to a revised June rate of $1.288 trillion. The increase was below economists’ estimates who had expected spending to increase by 0.3%.
It’s been a very volatile night for the British pound after British Prime Minister Boris Johnson and the Conservative Party lost their majority in the House of Commons after Conservative MP Phillip Lee defected to the Liberal Democrats over Brexit.
Mr Johnson is likely to lose this morning’s vote that will give the rebel alliance control of Commons business with the aim of passing legislation that would rule out No Deal. In the event that this should transpire Mr Johnson is expected to call for a snap election, expected to take place on Oct 14th.
The GBP traded below 1.20 against the USD, which barring the flash-crash in October 2016, is its lowest level since 1985, has since recovered and is currently trading at 1.2085.
Global equity markets remain mixed, - Dow -1.33%, S&P 500 -0.93%, FTSE -0.19%, DAX -0.36%, CAC -0.49%, Nikkei +0.02%, Shanghai +0.21%.
Gold prices are rising, up 1.0% trading at $1,544 an ounce. WTI Crude Oil prices continue to slide, down 1.3% trading at $53.84 a barrel.
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