AUD
The AUD continued to push higher last week despite a vacuum of economic data from Australia, as movements in the AUD were affected by offshore markets. The RBA Meeting Minutes for September provided the most direction locally and provided only a brief dampener for the AUD, which again found traction to produce new highs for the year.

The meeting’s minutes suggested that the board is in no rush to increase rates despite the government’s significant fiscal stimulus package, including an A$22B infrastructure program, whereby rates will need to be increased ‘in due course’ due to inflation. The existing interest rate differential however is providing strong support for the AUD with the benchmark rate maintained at 3% relative to Japan’s 0.1% and close to zero for the US.

The AUD found fresh legs soon after the RBA release as US industrial production rose above expectations and gold prices remained above USD1,000 with risk appetite returning to the market and demand for higher yielding assets increased. These gains were partially erased however due to a fall in commodity prices, namely gold and crude oil and due to signals of a slower economic recovery. There was also speculation about whether existing US fiscal stimulus will be maintained leading into this week’s FOMC meeting, which if reduced would increase demand for US assets.

The week ahead in Australia
Monday 21st  – New Motor Vehicle Sales
Wednesday 23rd – Skilled Vacancies

AUDUSD
The AUDUSD started last week in strong territory and pushed higher mid week to reach new highs for the year at the .8770 level, the currency pair finished the week at 0.8680.

The week ahead in the US:
Monday 21st – Leading Indicators
Tuesday 22nd – Housing Price Index, Richmond Fed Manufacturing Index, ABC/Washington Post Consumer Confidence.
Wednesday 23rd – MBA Mortgage Applications, Fed Interest Rate Decision.

AUDGBP
The AUDGBP went from strength to strength, starting the week at 0.5168 and closing the week at 0.5310.

The week ahead in the UK:
Wednesday 23rd  – BoE Minutes, BBA Mortgage Approvals.

AUDEUR
This pairing started the week just above 0.5900 pitching to .5940 and then closing the week close to where it started, just above the .5900 level at .5910.

The week ahead in the Eurozone:
Wednesday 23rd – EU PMU Manufacturing, PMI Services, Industrial New Orders

NZD
Last week headline and core retail sales both fell by 0.5 percent.  Economic survey of manufacturing for the June quarter showed that total manufacturing sales volumes rose 1.8 percent, although excluding meat and dairy manufacturing, sales fell 2.8 percent.  The BNZ business NZ PMI for August showed that the index fell 0.9 percentage points to 48.7.

REINZ house sales for August showed a drop, seasonally adjusted house sales fell 1.9 percent.  The median price rose to $346,750 to be up 5.1 percent on a year ago.  The median days to sell fell to 33 days.

This week’s data is expected to provide some comfort with an improving external position and the last quarter of negative growth before forward momentum resumes.

The week ahead in New Zealand:
Monday 21st – Visitors Arrivals (Aug) mom, Credit Card Spending (Aug) yoy
Tuesday 22nd – Current Account Balance (Q2), Westpac NZ Consumer Confidence (Q3)
Wednesday 23rd – GDP (Q2) qoq/yoy
Friday 25th – Trade Balance (Aug)

AUDNZD
AUDNZD had little volatility throughout the week, starting at 1.2223, hitting the high at 1.2270 and closing the week at 1.2230.

GBPNZD
GBPNZD started the week in firm territory at 2.3615 and then consistently fell away to close the week at 2.2982.

EURNZD
EURNZD started the week at 2.0677, peaked on Tuesday morning at the 2.0880 level and then fell away to close the week at 2.0700.

NZDUSD
The currency pair started the week at 0.7035, peaked on Thursday evening at 0.7145 and closed the week at 0.7080.