A$ Weakens On Softer Risk Sentiment & Weak External Data

Aussie seems pressured by lower iron ore, slightly softer local, US and HK equity sentiment and data showing a lower-than-expected Q2 net export contribution and the largest current account deficit in six years. AUDUSD is down 0.4% to 0.6765, close to the intraday low. The USD index is up around 0.1%.

• Q2’s current account deficit widened significantly more than expected at $10.7bn compared with $6.3bn in Q1, which was revised up. The net export contribution to GDP was 0.4pp lower than expected at 0.2pp. Government finance statistics showed that public demand contributed 0.4pp to Q2 growth after 0.2pp. GDP prints on Wednesday.
• AUDJPY is down 0.5% to 99.25, as the risk adverse yen is outperforming. AUDNZD is 0.2% lower at 1.0881 after briefly breaking above 1.09. AUDEUR is down 0.2% to 0.6118 and AUDGBP -0.3% to 0.5150.
• Equities are mixed with the ASX down 0.1% and Hang Seng flat but CSI 300 up 0.3%. The S&P e-mini is 0.1% lower. Oil prices are higher with WTI +0.6% to $74.00/bbl. Copper is down 0.6% and iron ore is $95-96/t.
• US manufacturing PMI/ISM for August and July construction spending are released and BoE’s Breeden and ECB’s Buch & Jochnick appear.