HiFX Morning Update Feb 15

The AUDUSD opens at 0.7908 (mid-rate) this morning.

The AUD is trading back above 79 US cents this morning with the USD underperforming in the face of better than expected inflation data.

The US inflation data printed ahead of expectations with the USD spiking higher on the announcement before gradually reversing the move over the next two hours.

The Labour Department report showed January CPI rose to 0.5% following an upwardly revised 0.2% result. Economists had forecast the index to rise by to 0.3% up from December’s previously reported 0.1% rise. Core consumer prices which exclude food and energy prices rose by 0.3% in January after inching up by 0.2% in December. Core prices had been expected to increase by 0.2%.

US retail sales for the month of January unexpectedly decreased, with the Commerce Department report showing sales fell by 0.3% following December’s 0.4% increase. Economists had expected January’s retail sales to increase by 0.2%.

The AUD has lost ground against the NZD with the NZD the best performing of the G10 currencies after the RBNZ quarterly business confidence survey showed business managers forecast annual inflation to average 2.11% over the next two years, from 2.02% in Q4 survey. This morning’s local employment report will be the next driver for AUD direction.

Global equity markets are broadly higher - Dow +0.21%, S&P 500 +0.62%, FTSE +0.64%, DAX +1.17%, CAC +1.10%, Nikkei -0.43, Shanghai +0.45%.

Gold prices have surged higher up 1.5% trading at $1,345 an ounce. WTI Crude Oil prices are edging higher, up 0.3% trading at $59.20 a barrel

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