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BY MATT RICHARDSON

Aussie tests technical supports and ECB forces Euro lower with dovish commentary


Australian Dollar

AUD / USD

Expected Range

0.7380 – 0.7530

The Australian Dollar remained on the back foot and unsuccessful at an attempt to break above 75c against the US Dollar. The AUD/USD pair moved from high of 0.7492 to a low of 0.7439 and despite weaker than expected US economic data overnight for both Initial Jobless Claims and Durable Goods the Greenback traded higher. Meanwhile, locally in a report released by ABS Q1 export prices rose much quicker than import prices giving another boost to Australia' term of trade. Export prices rose 9.4% and import prices rose 1.2% for the March quarter. Low tier data PPI and Private Sector Credit due today, near term support lies at 0.7440.

Great British Pound

GBP / AUD

Expected Range

1.7175 – 1.7425

The Great British Pound is higher this morning against its US counterpart reaching an overnight high of 1.2916. The pound sterling is currently trading near its highest level since Sept 2016 against the Greenback as Brexit talks dominate the political landscape. On the data front, today will see the release of Q1 GBP with expectations the economy grew by 0.4% in the first quarter of the year, following a 0.7% advance in the previous quarter. Today' economic calendar also features the release of BBA Mortgage Approvals with market forecast of 42.1K approved mortgages for the month of March, down on the previous month 42.6K. The GBP/USD is currently trading at 1.2901. We now expect support to hold on moves approaching 1.2870 while any upward push will likely meet resistance around 1.2920.

Majors

USD, EUR, JPY

Expected Range

N/A

The U.S dollar edged higher against the Euro through trade on Thursday forcing the 19 nation combined unit back below 1.09. The Euro came under selling pressure after ECB President Mario Draghi failed to proffer real insights into reducing the Banks quantitative easing program. Investors had hoped policymakers might adopt a more hawkish tone and suggest a reduction in bond buying and tightening of loose monetary conditions may commence later this year. In a press conference following the Banks monthly meeting Draghi stressed the pressures facing Central Bank officials had fostered a cautious approach to monetary policy amendments. Touching intraday lows at 1.0853 the Euro opens this morning buying 1.0873. Meanwhile the Japanese Yen opens largely unchanged enjoying small levels on support after the BoJ offered its most upbeat assessment of economic growth prospect in almost a decade. While failing to amend its current policy platform the BoJ upgraded their expectations for growth yet conceded price pressures and inflation remained stagnant and a drag on the economy. Having forced the USD to intraday lows at 111.06 the USD/JPY open this morning at 111.25 as attentions turn to advance 1st quarter GDP numbers as a marker of U.S economic health.

New Zealand Dollar

NZD / USD

Expected Range

0.6840 – 0.6940

Opening yesterday at 0.6890, The New Zealand Dollar hit an intraday high of 0.6920 before breaking lower. The Kiwi was one of the worst performing currencies in overnight trading falling as much as 1% and testing key support at 0.6850. United States unemployment claims and durable goods orders somewhat disappointed, allowing the Kiwi to recover slightly and opens at 0.6880. The New Zealand Dollar takes its direction from local Trade Balance and Building Consent data out this morning.

BY MATT RICHARDSON

AUD fails to capitalise on Greenback softness as U.S tax reform disappoints investors


Australian Dollar

AUD / USD

Expected Range

0.7440 – 0.7580

<div>The Australian Dollar opens lower against the Greenback this morning unable to hold above the 75c handle on the back of weaker than expected Australian inflation data yesterday. The annual rate of inflation rose to 2.1% in Q1 of 2017, from 1.5% in Q4 of 2016, the first print above 2% in 2 &frac12; years. However, underlying inflation stood at a quarterly rate of 0.4% and at an annual pace of 1.8%, still below the RBA' target band. With job growth and wage growth slow but house prices are still increasing it is unlikely the RBA will look at raising rates in the near future. The Aussie moved from highs of 0.7552 to an eventual low of 0.7454 a level not witnessed since January 17th. Locally we see the release of Import Prices ahead of the RBA Governor due to speak in the evening at the Renminbi Global Cities Dialogue Dinner in Sydney.</div>

Great British Pound

GBP / AUD

Expected Range

1.7025 – 1.7425

The Great British Pound edged marginally higher through trade on Wednesday consolidating recent gains and touching intraday highs at 1.2860. With little domestic data on hand to drive direction the GBP found support in disappointing tax reform proposals issued by the White House and a paring of recent USD gains. Having touched intraday lows at 1.2805 Sterling rebounded and seems to be reasonably well bid with supports at 1.28 and 1.27 as attentions turn to Friday' prelim CPI print as a key marker for direction leading into the weekend.

Majors

USD, EUR, JPY

Expected Range

N/A

New Zealand Dollar

NZD / USD

Expected Range

0.6820 – 0.7020

Headlines were dominated by tax reforms in the United States overnight as broad USD strength weighed heavily on the New Zealand Dollar. Starting the day at 0.6950, the Kiwi fell to an eventual overnight low of 0.6870 during the North American session against the US Dollar and tests March support. The Kiwi underperformed against the majority of currencies and with a lack of domestic data, will take cues from further offshore news as central banks in Japan and Europe take focus. The Kiwi opens this morning at 0.6890.

BY MATT RICHARDSON

Euro rally continues as French election jitters ease


Australian Dollar

AUD / USD

Expected Range

0.7480 - 0.7580

The Australian Dollar moved within a 20-pip range intraday yesterday as financial markets were closed observing the ANZAC public holiday. Once European markets opened the Australian dollar was dragged lower despite more risk appetite as geopolitical risks faded and higher commodity prices. AUD/USD fell from a high of 0.7572 to a low of 0.7520, the pair has since regained some losses at sits at 0.7535 at the time of writing. Locally sees the release of Australian CPI data which analysts consider one of the most important economic indicators. The forecast is expected to increase by 0.6% for Q1 2017.

Great British Pound

GBP / AUD

Expected Range

1.6875 - 1.7175

The Great British Pound opened this morning little changed when valued against its US Counterpart with the Sterling reaching an overnight high of 1.2845, up 0.33% on the day. With little to no macroeconomic data out of the UK today all eyes will be on the election polls, and the anticipated size of the Conservative majority in the upcoming UK elections. In the last week, the Pound Sterling has rallied over 300 points against the Greenback after Prime Minister Theresa May called of a snap election. The GBP/USD is currently trading at 1.2833. We now expect support to hold on moves approaching 1.2770 while any upward push will likely meet resistance around 1.2920.

Majors

USD, EUR, JPY

Expected Range

N/A

The U.S dollar enjoyed mixed fortunes through trade on Tuesday rallying against the Yen, Mexican Peso and Canadian Dollar while touching near six month lows against the Euro. The Greenback surged against the Canadian Dollar and Mexican Peso after the Trump administration announced a Tariff on the import of Lumber from Canada. The announcement is seen as a marker for future trade discussions and highlights the approach of the Trump government toward NAFTA and the future of the 20-year-old trade agreement. The Euro continued higher moving through 1.0950 as investors&rsquo; confidence in a centrist victory in next month' French election were bolstered as Emmanuel Macron' victory in the first round of voting was confirmed. The result eliminates a large portion of uncertainty surrounding the future of the Euro and European Union and prompts many market participants to expect a hawkish shift in sentiment from the ECB and a reduction in monetary stimulus. Attentions now turn to the Trump administration and the release of key Tax reforms Wednesday ahead of an ECB meeting and monetary policy comment Thursday as symbols for short to medium term direction.

New Zealand Dollar

NZD / USD

Expected Range

0.6920 - 0.7020

The New Zealand dollar broke 0.70 against the American Dollar as commodities currencies saw downside movements on thin liquidity, in the biggest daily loss since March. The Kiwi was also hampered by the Canadian Dollar, as tariffs were announced by the United States on soft lumber imports. As New Zealand observed the annual ANZAC public holiday, Kiwi drifted to an intraday low of 0.6985. Markets saw an overnight low of 0.6940 due to a risk on environment, and flows back into the USD. Local data set sees the release of Visitor Arrivals for April and Credit Card spending for the year as the New Zealand dollar opens at 0.6950 this morning.

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.

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