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BY MATT RICHARDSON

Tensions ease as Macron moves through round one; Euro rallies


Australian Dollar

AUD / USD

Expected Range

0.7490 – 0.7605

The Australian Dollar traded within a 30-pip range on Friday between 0.7515 and 0.7546 as geopolitical tensions regarding Syria and North Korea and concerns about the French presidential election continued to weigh on risk sentiment. There was no local data to report from Friday and therefore the Aussie looked offshore for direction. A mixed bag out of the United States capped any moves on the AUD/USD but gapped nearly 40 pips higher on the open this morning following the results of the first round of the French presidential election, early results showing that Emmanuel Macron and Marine Le Pen have qualified for the second round of the election. No local data due today and tomorrow the markets will be closed observing the ANZAC bank holiday.

Great British Pound

GBP / AUD

Expected Range

1.6910 - 1.7110

The Great British Pound ended the week higher across the board boosted after Prime Minister Theresa May' called for a general election that triggered rally in the pound sterling. The GBP/USD reached a six-month high of 1.2836 after Prime Minister Theresa May surprised markets by calling a snap general election in June. Chancellor Philip Hammond said the strength in the Sterling was a sign of confidence that the markets have in the future of the country. The GBP/USD is currently trading at 1.2811. We now expect support to hold on moves approaching 1.2745 while any upward push will likely meet resistance around 1.2860. The pound also hit a four-month high against the Euro of 1.1936.

Majors

USD, EUR, JPY

Expected Range

N/A

The Euro jumped upward in early trade this morning rallying to 5 month highs and moving back through 1.09. Early polling suggests both Macron and Le Pen will move through the first round of the French elections easing concerns of a run off between disruptive and radical candidates. Macron is highly touted as the only candidate capable of defeating far right nationalist Marine Le Pen and his advance reduces anxieties and political uncertainties that have plagued the Euro in the run up to this election. As markets prepare now for a Macron victory the upside potential for the Euro comes into focus as the ECB will be expected to maintain its QE reduction plan, while Emerging Markets and risk driven currencies find support. With attentions squarely focused on the French Election we can expect the Euro to push toward 1.10 in the immediate short term with further gains toward 1.12 should Macron take office on May seven.

New Zealand Dollar

NZD / USD

Expected Range

0.6930 - 0.7130

The New Zealand dollar jumped marginally higher through trade this morning, advancing back above the 0.70 handle. Markets demand for risk based and commodity driven currencies increased in early trade as the likelihood radical far right candidate Marine Le Pen will take office diminished following the first round of voting in the French election. With little domestic data on hand to drive direction the NZD is at the mercy of offshore stimuli and with the French election dominating risk demand the Kiwi could find support as polling is completed. With resistance still firmly entrenched on moves toward 0.7075 and 0.7130 we still expect topside gains to be relatively muted throughout trade today.

BY MATT RICHARDSON

French Election rides front and centre in driving direction


Australian Dollar

AUD / USD

Expected Range

0.7460 – 0.7580

The Australian Dollar advanced against the US Dollar on Thursday reaching an overnight high of 0.7546 before settling around 0.7520. With little to no data out today Sunday' first round of voting in the French Presidential elections will be one of the main talking point today across global markets. The AUD/USD pair is currently trading at 0.7524. We now expect support to hold on moves approaching 0.7491 while any upward push will likely meet resistance around 0.7604. The Australian dollar is also higher this morning against the Yen (82.28) and the Euro (0.7026).

Great British Pound

GBP / AUD

Expected Range

1.6910 – 1.7110

The Great British Pound opens stronger at 1.2809 against the US Dollar vs this time yesterday as US domestic data failed to impress. Jobless claims for the week ending April 15th rose and the Philadelphia Fed Manufacturing Index declined. One of the major European Banks Credit Suisse have said based on latest developments in the UK they are looking to raise their three-month and twelve-month GBP/USD forecast which at the moment sits at 1.25. The main release for the Pound all week is later today being March Retail Sales, expectations are not overly optimistic with analysts expecting headline sales to fall -0.2% compared to the previous month but to rise by 3.6% from the previous year. Meanwhile, as France heads to the polls this weekend for the first round vote markets could see some heavy volatility Monday morning in Australia (Sunday night for Europe) given the high level of undecided voters.

Majors

USD, EUR, JPY

Expected Range

N/A

The USD opens marginally stronger against a basket of major currency counterparts this morning having shrugged off early losses as investors responded to stable macroeconomic data sets. Having suffered heavy selling in early trade and relinquishing ground against the Euro the dollar clawed back as steady unemployment claims data and upbeat business activity enabled market participants to maintain views of modest growth and inflation prospects. The Euro touched intraday highs at 1.0777 and maintained three week highs against as analysts place centrist Emmanuel Macron ahead of nationalist Marine Le Pen as the front runner expected to take the Presidency. Attentions through Friday and into the weekend lie squarely on the French election. With the first round of voting due to take place Sunday markets are preparing, in accordance with polls, for Macron and Le Pen to move through into round two and face off ahead of the final vote on May 7. The Euro should remain bullish as support for Macron grows however uncertainty surrounding voter turnout leaves analysts wary of a Brexit/Trump style upset.

New Zealand Dollar

NZD / USD

Expected Range

0.6960 – 0.7080

The New Zealand dollar relinquished early gains bouncing of intraday highs at 0.7052 as the U.S dollar advanced on expectations of stable growth and an uptick in inflation. While commodities came under pressure as Iron Ore moved lower the Kiwi found support on moves toward the 0.70 handle. The NZD has been relatively well bid on moves toward this psychological level however a break below near term support at 0.6960 could signal entry into a deeper bearish channel while a break below 0.6850 would open the door to wider losses in the face of rising global tensions and political uncertainties. Attentions today remain off shore with risk demand and Euro flows driving direction into the weekend.

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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