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BY JOEL HOLMES

Sterling Advances - UK PM Theresa May calls snap election


Australian Dollar

AUD / USD

Expected Range

0.7500 - 0.7600

The Australian Dollar opened this morning little changed when valued against its US Counterpart with the pair retreating from a weekly high of 0.7596. The AUD/USD is currently trading at 0.7554, down 0.4 per cent. The spot price of iron ore now has fallen one-third from its February peak of $94.86 a tonne. Currently trading at $63.20 a dry tonne, according to Metal Bulletin. On the data front, another quiet day expected with the only scheduled release NAB Quarterly Business Confidence. Investor sentiment still the main driver for the Aussie over the next 24-hour period.

Great British Pound

GBP / AUD

Expected Range

1.6900 - 1.7200

The Great British Pound has rallied overnight against the U.S Dollar as Prime Minister Theresa May has announced her intention to push for a snap election for the UK on June 8 this year. The GBP/USD immediately shot to 1.2902 on the back of the news before settling around 1.2850. According to opinion polls it is thought that by calling an early election the Conservatives are likely to improve their existing position with a current 17 point lead ahead of Labour. Some analysts however are cautious with the Sterling strength and many predict it may be witnessing a ‘short-squeeze’. GBP/EUR at a four-month high currently changing hands at 1.1970 and GBP/AUD at a 15-week high at 1.6995

Majors

USD, EUR, JPY

Expected Range

N/A

As markets returned from the Easter break, The US Dollar continued its downside momentum after digesting weaker domestic inflation and retail sales last week. Both Equities and longer dated U.S. Treasuries weakened as the USD/JPY saw further losses to 108.40, not seen since November ’16. Euro saw a quiet start to the weak as markets were closed for Easter Monday. EUR/USD continued its ascent by 1.2% for the day on general USD weakness. The general focus overnight was the snap election by UK' Prime Minister Theresa May causing EUR/GBP to nose-dive from 0.8500 to a 2017 low of 0.8350. Financial Markets turn to France for Sundays General Election, as they start to price in the possibility of an unexpected win by Far-Right Leader Marine Le Pen who holds 23% of the first round vote in latest polls.

New Zealand Dollar

NZD / USD

Expected Range

0.7000 - 0.7100

The New Zealand Dollar advanced against the US Dollar on Tuesday after the latest Global Dairy Trade auction rose for the third time in a row. The kiwi dollar is currently well supported at the moment on the back of recent higher inflation data and rising dairy auction results. The Kiwi reached an overnight high of 0.7045 against the greenback, up 0.4 per cent in the last 24-hours. On the local data front, today the only scheduled release is the quarterly release of Consumer Price Index which is expected to rise from 0.4 percent to 0.8 percent on the previous quarter.

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).

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