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BY JOEL HOLMES

US dollar loses momentum on falling inflation


Australian Dollar

AUD / USD

Expected Range

0.7500 – 0.7650

Great British Pound

GBP / AUD

Expected Range

1.6450 – 1.6600

The Great British Pound moved towards levels of 1.2600 against the U.S Dollar in a market of low volumes having observing the Easter holiday period. The GBP has been one of the outperformers as geopolitical tensions rise between the USA and North Korea and the risk of the Kim Jong-Un led nation declaring a nuclear war. GBP/USD rose to a three-week high of 1.2596 meanwhile GBP/JPY is buying close to 137.00. A very quiet week regarding UK macroeconomic data until this Friday with Retail Sales due.

Majors

USD, EUR, JPY

Expected Range

N/A

Markets were subdued with low liquidity as expected over the observed Easter holiday. A weak inflation reading of -0.3% in the United States on Good Friday saw the US Dollar index end the week lower at 100.40. Furthermore, a softer retail figure in the United States extended declines on the USD/JPY pair and below 109.00 for the first time this year. A failed missile attempt in North Korea has halted a major risk off move on currency markets, but remains on edge as US Vice President Mike Pence noted the United States will deal with North Korea should China not. EUR/USD pushed higher on broader USD weakness, trading off support at 1.06 to a high of 1.0670 in overnight trading.

New Zealand Dollar

NZD / USD

Expected Range

0.6950 – 0.7050

The New Zealand dollar opens this morning little changed when valued against its US Counterpart. Having traded to an overnight high of 0.7035 the past 24 hours has been a largely uninspiring trading window for the Kiwi dollar. The NZD/USD pair is currently trading at 0.7010. We now expect support to hold on moves approaching 0.6965 while any upward push will likely meet resistance around 0.7012. With no local economic data scheduled for today, attentions turn to tonight's Global Dairy Trade auction, amid expectations whole milk powder prices could rise 5 percent, based on NZX dairy futures. Looking ahead this week all eyes will be on Thursday' CPI data release for the previous quarter.

BY SHAMEEM MUSA

Trump thinks Greenback is ‘too strong’


Australian Dollar

AUD / USD

Expected Range

0.7450 – 0.7570

<div>The Australian dollar has been steady this week, trading on the 0.75c support line despite geopolitical risks continuing to be the main headliner on currency markets. The Aussie drifted to an intraday low of 0.7485 as Westpac consumer sentiment dipped 0.7% in April and the fifth consecutive month of index numbers below 100. Despite an eventual low of 0.7475 overnight the Australian dollar has been sparked into life on President Trumps latest comments this morning that the US Dollar is too strong in an interview with the Wall St Journal. This immediately sent the Australian dollar higher where we open at 0.7540 this morning.</div>

Great British Pound

GBP / AUD

Expected Range

1.6580 – 1.6800

Movements were limited on declining liquidity for the Great British Pound as we move into Easter holidays. Sitting at the 1.2500 handle against its US counterpart, we saw the UK unemployment rate remain steady at 4.7% with average weekly earnings increasing by 2.3% in the year to January. The UK Claimant count surprised many with a decrease in job claims of 25.5K. We saw cable rally on a softer dollar initially from 1.2480 to 1.2520 before Trumps jawboning for a softer dollar lifted the GBP/USD cross see to eventual high this morning of 1.2550. The Great British Pound hit two month highs against the Australian dollar of 1.6720, drifting lower to open at 1.6650. The New Zealand dollar tested December 2016 highs of 1.8080 overnight and opens at 1.7970.

Majors

USD, EUR, JPY

Expected Range

N/A

New Zealand Dollar

NZD / USD

Expected Range

0.6900 – 0.7050

The New Zealand Dollar advanced against the US Dollar on Wednesday as the greenback came under some renewed pressure after Trump told the Wall Street Journal he would like to see US interest rates stay low. The Kiwi reached an overnight high of 0.6987, up 0.32 per cent for the session. The NZD/USD pair is currently trading at 0.6977. We now expect support to hold on moves approaching 0.6950 while any upward push will likely meet resistance around 0.6994. On the data front another quiet session expected locally with the only release Food Price Index for the month of March. The Kiwi opens this morning weaker against both the Pound Sterling (0.5566) and the Australian dollar (1.0788).

BY SHAMEEM MUSA

Tensions rise between President Trump and Kim Jong-un


Australian Dollar

AUD / USD

Expected Range

0.7450 - 0.7530

A quiet day on the Australian dollar front saw a 20 pip trading range during the local session. Starting the day at 0.75 support against the US Dollar, the Aussie remains vulnerable to downside risk as NAB business confidence dropped one index point to +6 in March. This despite comments of the strongest conditions since the GFC, an intraday low of 0.7495 ensued. Despite clawing its way back to an overnight high of 0.7515, we saw swings to a low of 0.7475 as markets continue to see movements back into the US Dollar and Yen as risk off tones continue. Investors look to this morning' data set of Westpac consumer sentiment and Chinese inflation figures as the Australian dollar opens at 0.7497.

Great British Pound

GBP / AUD

Expected Range

1.6550 - 1.6750

The Great British Pound rallied through trade on Tuesday extending Monday' rally pushing upward toward 1.25. Sterling rallied back through 1.24 after annualised CPI showed a 2.3% increase in prices, a print beyond average market participant' expectations. The strong read supports a recent acceleration in price pressures as headline inflation gathers momentum and calls for the BoE to temper quantitative easing programs and tighten monetary policy escalate. Jumping through 1.2450 sterling touched intraday highs at 1.2495 as further support was found in a weakening USD. The dollar fell broadly as declining treasury yields and escalating geopolitical risks pushed investors toward safe haven assets. Attentions now turn to BoE head Mark Carney for commentary and guidance on future monetary policy with Wage Growth and Average Earnings data providing macroeconomic direction. While the bullish trend remains in tack a move toward an d below 1.2302/05 could signal a shift in sentiment and move outside the current channel.

Majors

USD, EUR, JPY

Expected Range

N/A

Rising geopolitical concerns are taking centre stage in the past 24 hours following a warning from North Korea of a nuclear strike should the US provoke them. As a US war ship sail towards to the Korean Peninsula a flight to safety towards US denominated assets are being purchased by investors. EUR/USD is little changed from this time yesterday, we did see a brief rally to 1.0630 before settling back at 1.0605. One pair not affected is the USD/JPY which has continued to grind lower and hit a fresh five-month low of 109.53. The economic document today sees the release of Japanese Machine Orders and PPI however, markets are likely to be focused on any further developments surrounding North Korea and President Trump Twitter tweets.

New Zealand Dollar

NZD / USD

Expected Range

0.6860 - 0.7025

The New Zealand dollar opens this morning little changed when valued against its US Counterpart. Having traded to an overnight high of 0.6968 the past 24 hours has been a largely uninspiring trading window for the Kiwi dollar. The NZD/USD pair is currently trading at 0.6954. We now expect support to hold on moves approaching 0.6890 while any upward push will likely meet resistance around 0.6975. On the data front another quiet session expected locally with little to no economic data due.

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