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AUD / USD
0.7450 – 0.7575
The Australian dollar fell to three month lows on Friday evening as a combination of risk adverse movements and a sharp fall in Iron Ore prices saw the Aussie dip below US 0.75c. Starting Friday morning at 0.7545, news of an unexpected US Missile strike on Syria saw the market scramble for safe haven assets, the Australian dollar immediately dropped thirty basis points to 0.7515. Spot Iron ore prices were smashed by more than 6% putting further pressure on commodity currencies. Non-Farm Payrolls disappointed markets with only 98,000 jobs created vs last month' rise of over 200K. The Aussie rallied briefly as high as 0.7540 before the US clawed back losses in the North American session. The Australian dollar opens above support at 0.75 on open this morning.
Great British Pound
GBP / AUD
1.6400 - 1.6600
The Great British Pound edged lower through trade on Friday slipping through 1.2450 and 1.24 following a contraction in manufacturing production and upbeat U.S jobless rates. The Pound marked its first weekly decline in a month extending Thursday' losses and closing in on the critical 1.23 handle. Despite a mixed U.S labour market report wherein the number of new jobs added to the economy feel short of market expectations Sterling was unable to stem the downside flow as investors remain tilted to a bearish bias. Diverging monetary policy platforms will continue to weigh heavy on Cable advances as attentions this week turn to U.K inflation data and wage growth. A poor print could see technical supports at 1.2300/05 tested and a deeper break lower emerge.
USD, EUR, JPY
The U.S Dollar closed the first week of April higher against a basket of major currencies despite a weaker than expected Nonfarm payrolls figure out of the U.S. It was the lowest reading for 2017 growing by 98,000 in March with expectations of 180,000. The payrolls print hasn’t affected market and economists views that the Federal Reserve are expected to raise rates in June and begin balance sheet normalisation in December. EUR/USD was knocked off its perch of 1.0680 down to 1.0577. USD/JPY initially weakened, but regained ground later to finish the session higher at 111.20.
New Zealand Dollar
NZD / USD
0.6860 - 0.7020
In late New York trading on Friday the New Zealand dollar fell to its lowest level in almost four weeks. The kiwi dollar traded to a 24-hour low of 0.6929 as New York Fed President William Dudley said moving forward interest rates will be primary policy tool and he didn't believe it will shrink its balance sheet. Data is light out of New Zealand this week in the lead up to the Easter break with the only release Thursday' Business NZ Manufacturing Index. The NZD/USD pair is currently trading at 0.6937. We now expect support to hold on moves approaching 0.6890 while any upward push will likely meet resistance around 0.6995.
0.7500 – 0.7650
The Australian dollar again offered little to incite excitement through trade on Thursday failing to recoup early week losses and bounced about amid a 40 point range between 0.7535 and 0.7575.With little domestic data on hand to drive direction the AUD was at the mercy of offshore stimulants and moved marginally lower throughout the day as investors adding support to the USD on larger than expected fall in unemployment claims. Losses were however tempered as market participants warily sat back ahead of a two day summit between Presidents Trump and Xi Jinping. The risk of hard-line claims of currency manipulation is forcing investors to the sidelines as attentions turn to today' all important non-farm payroll print. The Aussie remains poised to break either side of bullish and bearish channels with a close below the 200 day moving average possibly prompting a shift toward the March low.
1.6300 – 1.6600
The Great British Pound edged ever so marginally lower through trade on Thursday largely holding onto gains enjoyed following Wednesday' upbeat services print. Slipping back below 1.25 the bound bounced about amid a 50 point range finding support on moves toward 1.2450 and touched intraday lows at 1.2451 largely shrugging off a marked decline in housing equity withdrawals. Having consolidated above the 55 day moving average Sterling looks set to test a near term bullish uptrend with support on moved toward 1.2300, however a consolidated move below this key resistance point could signal a directional shift and open moves toward 1.2150 and January lows near 1.20. Attentions today turn to US Non-Farm Payroll numbers, domestic manufacturing data and BoE governor Carney for direction into the weekend.
The US dollar is higher when valued against most of its major currency counterparts. Overnight U.S. Jobless Claims declined by 25,000 to a Five-Week low of 234,000 in the week ended April 1. With the US labor force showing signs of a recovery all eyes will be on tonight' US Nonfarm Payrolls Report which are expected to have added 174K new jobs in March, after adding 235K in February. The EUR/USD pair is currently trading at 1.0643, the lowest level in nearly three weeks. We now expect support to hold on moves approaching 1.0610 while any upward push will likely meet resistance around 1.0685.
0.6925 – 0.7025
The New Zealand Dollar traded within a narrow range yesterday moving between levels of 0.6960 and 0.6990 against the U.S Dollar. With little in the way of local macroeconomic data the local unit looked elsewhere for market direction, US initial claims ended last month on a high note with unemployment claims decreasing by 25k to 234k, this week' improvements were driven by a sharp decrease in claims in NJ, PA and NY states. The data weighed on the New Zealand Dollar which is failing to move past key resistance levels of 70c. Looking ahead, markets are on tender hooks ahead of a meeting between the U.S president Donald Trump and the Chinese President Xi Jingping. President Trump tweeted last week that the summit “will be very difficult”. The New Zealand Dollar slightly higher against the Euro buying 0.6546 and also up against the Japanese Yen at 77.25.
0.7490 – 0.7615
The Australian dollar offered little to excite investors through trade on Wednesday, bouncing amid a 30 point range and failing to recoup losses suffered earlier in the week. Having broken back below the 0.76 handle following the RBA' dovish undertone and a softer than anticipated retails sales print, the AUD looked offshore for further directional impetus with little domestic data to drive direction. Despite a weakening USD the AUD failed to force a recovery and mount a move back above 0.76 and its short term moving average at 0.7614. Despite the early week sell off the bullish uptrend remains largely intact however failure to bounce higher may incite a bearish shift in sentiment and March' 0.75 low suddenly becomes a key resistance point. Attentions into the end of the week turn to U.S Non-Farm payroll numbers as the primary marker driving direction.
1.6350 – 1.6550
The Great British Pound traded in a tight twenty-point range against the US Dollar in yesterday' Asian session between 1.2425 and 1.2445. Sterling was bolstered early on during European hours by a strong UK Services PMI reading indicating a change in momentum after seeing a five-month low in February. Business activity grew at the strongest rates this year as the GBP/USD cross immediately jumped fifty basis points to 1.2485, before pulling back slightly on a higher than expected American ADP Non-Farm Employment figure. Cable regained its momentum on broad USD weakness following the release of FOMC minutes, as it attempts to push through 1.2500 on open this morning. The Great British Pound is trading higher against the Australian dollar 1.6500 and the New Zealand Dollar 1.7910.
0.6890 – 0.7020
The New Zealand Dollar remained under 70c during yesterday' session against the US Dollar and dipped to an eventual low of 0.6932 during the US session. Intraday we saw the release of ANZ Commodity prices released by the ANZ National Bank which reported a small increase 0.4% for the month of March vs a print of a 2.0% increase for February, the data did little to move the NZD/USD which still remains under pressure. With stronger than expected U.S Private Sector Employment data the pair was dragged lower to 0.6932, however, the Dollar softened after the release of the FOMC minutes. The Fed is now expecting to begin balance sheet reduction later this year and may take a pause in raising the official short-term interest rate, the NZD/USD recouped all losses to close Wednesday' session at 0.6965. The remainder of week is light on economic releases locally and will take further direction from offshore markets.
0.7500 - 0.7650
The Australian Dollar edged lower through trade on Tuesday drifting below 0.76 on the back of a softer than anticipated Retail Sales print and a decidedly dovish RBA Monetary Policy Statement. While the RBA decision to maintain the current cash rate came as little surprise to investors the Board proffered a somewhat dour assessment of economic growth conditions and price pressures leading market participants to amend their current monetary policy expectations. Having broken support at 0.7590/0.76 the Aussie touched intraday and three week lows at 0.7545 marking a near 2 cent sell off since reaching 0.7750 in mid-march. The selloff has been sparked by renewed expectations for U.S interest rate hikes and a suspected narrowing in the yield advantage. Prior to yesterday' monetary policy assessment markets anticipated the RBA would maintain its neutral policy stance with any deterioration in the AUD yield deriving from Federal Reserve' rate hikes. Any suggestion the RBA may lower rates to stimulate growth and drive prices higher will only accelerate AUD repositioning and a break below 0.7530 could prompt a deeper downward correction.
1.6300 - 1.6600
The Great British Pound flat lined during the Asian session sitting just under the 1.2500 mark against the US Dollar. The Sterling was then aggressively sold off as a bout of risk aversion took place on equity markets to see a low of 1.2425 late in the piece as it headed into the European session. We saw a weaker British Construction PMI reading as the construction industry cooled off in March. This did little to help the cable cross in the local session as the Sterling traded in a forty-point range of 1.2420-1.2460. UK markets look to the latest Services PMI data set this evening hoping for rebound from a dip in February. The Great British Pound has seen little change from open yesterday against the Australian dollar, currently swapping hands at 1.6440 and is higher against the New Zealand dollar 1.7825.
Fairly quiet US session yesterday with the only major data release being US Trade Balance for the month of February. The U.S. trade deficit fell more than expected as exports increased to a two-year high and slowing domestic demand weighed on imports. US trade balance rose from -$48.2bn to -$43.6bn. Today will see the release of Services PMI and ISM Non-Manufacturing PMI reports for March, along with the release of the Federal Open Market Committee (FOMC) minutes from its previous meeting in March when the Federal Reserve raised the official cash rate by 25 basis points. Looking ahead at the end of the week all eyes this week will be on the US Nonfarm payrolls on Friday. The EUR/USD pair touched a 3-week low overnight of 1.0635 and is currently trading at 1.0678. While the Sterling fell to a weekly low 1.2419 against the greenback. The GBP/USD is currently trading at 1.2432.
0.6925 - 0.7025
The New Zealand Dollar retreated early on and by lunchtime had fallen under 70c against the U.S Dollar. Yesterday, The New Zealand Institute of Economic Research Quarterly Survey of Business Option showed a drop in business confidence for the first quarter of 2017 however, businesses remained upbeat with expected annual growth for the economy to remain around 3 percent over the course of the year. The Kiwi barley nudged on the news however was caught in the pull back of the Australian dollar and the RBA Monetary Policy Statement. As local markets closed and the European and US session began the Kiwi drifted lower to an eventual low of 0.6966, the GlobalDairyTrade auction despite rising 1.6% had no impact on the local unit. Looking ahead, ANZ Commodity Prices are due for release this morning and key macroeconomic pieces out of the USA.
0.7550 – 0.7750
The Australian Dollar edged lower throughout trade on Monday following a softer than anticipated Retail Sales Print. Consumer spending levels fell in February forcing a knee jerk sell off in the AUD and saw the commodity driven unit test technical supports at 0.7600/10. Having touched intraday lows at 0.7592 the Aussie then maintained a tight trading band holding on just above the 0.76 handle for much of the European and North American trading sessions. As investors attentions turn to the RBA and renewed advice on future monetary policy expectations, the AUD could test recent ranges on a dour interest rate dogma, however with most market participants expecting the RBA to maintain its neutral policy stance, excessive swings outside 0.75 – 0.77 are unlikely in the short term. Nevertheless the medium term outlook could see the AUD drift lower as the gap between Fed and RBA interest rates narrows and the AUD stretches its longest long position in 12 months.
1.6200 – 1.6700
The Great British Pound saw losses overnight after trading as high as 1.2550 in the Mondays Asian session. A weak UK Manufacturing PMI reading for the third month in a row saw the Sterling sink to 1.2490. Furthermore, manufacturing employment figures out of the United States hit six year highs pushing the Sterling to eventual lows of 1.2470 against the US Dollar. The Cable crossed regained some momentum to test 1.2500 on open this morning. The Pound is also lower against the Australian Dollar 1.6410 and New Zealand Dollar 1.7790.
The U.S Dollar enjoyed mixed fortunes through trade on Monday advancing early before relinquishing gains into the daily close. On the data front, yesterday US manufacturing looks to have cooled from the previous month. The ISM manufacturing index edged back half a point to 57.2 in March, down from January's 57.7. Looking ahead today in the US we see the release of trade figures, factory orders and revised durable goods orders for February. The EUR/USD pair is currently trading at 1.0666, having traded to a to a fresh 3-week low of 1.0642 overnight. In Europe today attentions, will turn to the release of Eurozone retail sales along with UK construction PMI.
0.6920 – 0.7120
The New Zealand Dollar is back to where we opened this time yesterday against the U.S Dollar buying 0.7015 at the time of writing. The pair moved back under the 70c handle intraday to a low of 0.6985 thanks to a push lower in commodity prices. However, the Kiwi found momentum again as U.S economic data was released showing that growth in the manufacturing sector had slowed last month suggesting the Federal Reserve is still likely to move at a gradual pace regarding raising interest rates over the course of the next year. The New Zealand Dollar buys 0.6570 against the Euro and 77.74 against the Japanese Yen. Looking ahead, tonight we will see the release of the GlobalDairyTrade auction which measures the average price of dairy products sold at auction, should we see another increase as per last month the Kiwi could hold its ground above 70c.
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