Market Update – 18th September 2017 – AUD/GBP On A Tear To The Downside As Inflation Picks Up In The UK

Data releases Friday night included U.S retail sales, industrial production and UoM consumer sentiment. The data came out a little poorer than an anticipated with both retail sales and industrial production failing to meet expectations and even turning negative. Despite the poor data U.S equities still made marginal gains, up across the board with the Dow and Nasdaq the best performers up 0.3%. European equities didn’t fair so well with the FTSE down as much as 1%. Asian equities were mixed but on a side note, the Australian ASX 200 is the worst performer in Asia this year up only 7.5% which is markedly lower than the Hong Kong and Japanese indexes which have made gains of between 20-25% this year.

The Aussie dollar is more or less glued to the 0.8000 level vs. the Greenback failing to make much headway above or below this level recently. AUD/GBP has been on a tear to the downside as inflation and growth metrics continue to be solid out of the U.K. AUD/GBP which had been trading at nearly 0.6200 a few weeks ago, is now back below 0.5900. Whether these levels hold really depends alot on the Bank of England and how keen they are to raise interest rates from record lows at 0.25%. But there certainly is a bit of a groundswell, with some more dovish members of the BOE now keen to start lifting interest rates, perhaps as early as next months meeting. Stay tuned.

AUD EXCHANGE RATES:

AUD/USD – 0.7981

AUD/GBP – 0.5886

AUD/EUR – 0.6694

AUD/NZD – 1.0968

AUD/JPY – 88.803

DATA RELEASES TODAY:

CNY – CPI and PPI at 11.30am