Strong Economic Data Supports AUD While US Yields Give USD Another Lift
Leading Asia-Pacific indices to the upside is the Topix at +1.36%, followed by the Nikkei 225 at +0.65% and the ASX 200 at +0.32%. The CSI 300 and Hang Seng are both negative on the session at -0.20% and -0.46%, respectively.
In the FX complex, the main focus continued to revolve around USD, with further strength in US yields supporting the reserve currency. Consequently, DXY once again tested the 102.00 handle but fell short of yesterday’s highs and has since begun pulling back.
Another currency of note for the session is AUD, which currently leads the FX majors to the upside, supported by Australia’s positive GDP report. Summarising the report, CommSec succinctly noted that “all indicators show the economy to be doing well, actually very well… The data confirms that the era of super-low interest rates has outlived its usefulness. A more ‘normal’ economy requires more ‘normal’ interest rates.”
Looking ahead, today’s European session will see the release of PMI data from throughout Europe and the UK. However, the main event of the day will be the BoC’s latest policy decision in the following US trading session.
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