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BY JOEL HOLMES

European markets calm ahead of French Presidential election


Australian Dollar

AUD / USD

Expected Range

0.7440 – 0.7560

<div>The Australian Dollar is slightly weaker today when valued against its US counterpart falling overnight to a low of 0.7490, down 0.86 per cent for the session. Yesterday we saw the release of New Motor Vehicles Sales for the month of March. The March 2017 trend estimate decreased by 0.3% when compared with February 2017. NAB Quarterly Business Confidence will be released today at 11.30am AEST. The AUD/USD pair is currently trading at 0.7494. We now expect support to hold on moves approaching 0.7491 while any upward push will likely meet resistance around 0.7609. The Australian dollar is also lower this morning against the Yen (81.64) and the Euro (0.6996).</div>

Great British Pound

GBP / AUD

Expected Range

1.6950 – 1.7150

The Great British Pound has pulled back a shade off six-month highs witnessed on Tuesday against the Greenback, the pair moved lower to 1.2790 however still remains in a strong position buoyed by the UK Prime Minister announcing a snap election to solidify her mandate for Brexit negotiations. Meanwhile, the Greenback remains under pressure as geological tensions play a leading role amongst the markets and expectations of a June rate hike by the US Fed has reduced. Looking at overall weekly percentage changes the Pound has moved over 3% against the Australian Dollar buying 1.7050 and over 2% against the New Zealand Dollar at 1.8260 at the time of writing. The GBP/AUD has now arguably established a short-term uptrend with traders suggesting the pair could be approaching January 2017 highs. Analysts are also expecting the GBP/NZD strength to continue with an eventual target of 1.9000 in sight.

Majors

USD, EUR, JPY

Expected Range

N/A

New Zealand Dollar

NZD / USD

Expected Range

0.6950 – 0.7050

The New Zealand dollar edged lower through trade on Wednesday as commodity prices fell and the US dollar recouped some of the week' earlier losses. Breaking below the 0.70 handle the NZD touched intraday lows at 0.6997 after commodity prices, led by oil and iron ore tumbled and risk appetite continued to wain in the face of increasing tension on the Korean Peninsula. The early week rebound appears vulnerable ahead of Today' CPI print with near term support resting at 0.6950, while a break below 0.6860 could signal a bearish channel has formed. However a stronger than expected print and read above the RBNZ' 2% target could prompt a move back toward key technical resistance points at 0.7075/71. All eyes today turn to CPI and risk appetite for direction into the end of the week.

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 &lsquo;short-squeeze&rsquo;. 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 &rsquo;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.

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