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BY JOEL HOLMES

Australian Dollar Steady – BOE Super Thursday Looms


Australian Dollar

AUD / USD

Expected Range

0.7900– 0.8000

Struggling to recapture levels above the 80 US Cents mark, the Australian dollar enjoyed a relatively quiet session yesterday. Having lost 0.5 percent when valued against its US Counterpart earlier in the week, price activity has been limited over the past 24 hours as investors await the release of Trade Balance figures which are due out at 11:30am AEST. Whilst minutes from the RBA' August meeting are also lingering on the horizon, near-term volatility levels could be further jolted on Friday ahead of a key labour market report from the United States. Idle for the time-being the Australian Dollar currently swaps hands at a rate of 0.7965.

Great British Pound

GBP / AUD

Expected Range

1.6400– 1.6700

Majors

USD, EUR, JPY

Expected Range

N/A

The U.S. dollar dipped slightly lower in overnight movements as ADP non-farm employment just missed forecasts of an increase of 185,000 jobs. Despite a reading of 178,000 jobs created in the last month, the USD/JPY started its decline from intraday highs of 110.97 to see lows of 110.30. The U.S. Dollar index hit fresh 15 month lows overnight of 92.60, with the majority of movement off a stronger Euro and doubts over further increases in interest rates this year by the Federal Reserve. The DXY eventually regained most of the losses to be 0.16% down for the day at 92.88. EUR/USD rallied a cent higher to continue its bullish run off a weaker greenback and eventually topping out overnight at 1.1902. With political tensions continuing to rise in the United States, the greenback could continue to remain under pressure in the lead up to Non-Farm Employment figures on Friday evening.

New Zealand Dollar

NZD / USD

Expected Range

0.7350 – 0.7475

The New Zealand dollar continued its’ bearish momentum after yesterday' weaker than expected employment data provided further impetus for the Reserve Bank to hold cash rates for an extended period of time. The labour market report was a mixed bag but ultimately showed a fall of 0.2% in employment figures against an expected increase of 0.7%. As a consequence, the Kiwi fell from its previous open at 0.7471 to trade at a near week low of 0.7410. Opening this morning slightly higher at 0.7415 the Kiwi also felt the added pressure of the latest Global Dairy Trade auction results which showed a contraction of 1.6%; marking its fastest rate of contraction since March. The Pair now turns to the ANZ commodity price index for direction locally.

BY JOEL HOLMES

US Dollar weakness takes a breather


Australian Dollar

AUD / USD

Expected Range

0.7900– 0.8000

In a decision unanimously anticipated the Reserve Bank of Australia maintained the existing cash rate at 1.5 percent. Whilst the accompanying statement was well neutralised, suggesting a window of monetary policy stagnation over the medium-term, specific mention was given to the strength of AUD with policy makers stating that future exchange rate levels would be a key contributor for economic activity and inflation. Falling in the aftermath the Australian dollar has failed to consolidate levels up above the 80 US Cents mark overnight, opening 0.5 percent lower this morning at a rate of 0.7967.

Great British Pound

GBP / AUD

Expected Range

1.6400– 1.6700

Majors

USD, EUR, JPY

Expected Range

N/A

The US dollar saw some relief overnight as the US Dollar index looks to claw its way back from its lowest levels since May 2016, trading slightly higher at 93.05 and up 0.22% for the day. Inflationary measures in the US core PCE release was slightly higher and provided support for a slight reversal in recent USD downward movements. United States Manufacturing PMI came in at expectations with manufacturing prices expanded for the month of July. Despite European area flash GDP growing by 0.6% for the 2nd quarter of 2017, EUR/USD took a breather from its recent highs and pulled back to short term test support at 1.1800 after seeing initial highs of 1.1837. Despite a dip below 110 overnight the USD/JPY cross held firm as Japanese Yen saw weakness on political developments with a reshuffle by Prime Minister Abe this week. ADP Non-Farm Employment figures is the major news release over the next 24 hours.

New Zealand Dollar

NZD / USD

Expected Range

0.7350 – 0.7500

The Kiwi fell in overnight trading as the Greenback hit back against is detractors. Bundled in with other "commodity" currencies, the Kiwi shed 0.5% from its daily high of 0.7504 in overnight trading. Further compounding the decline this morning were below expectation employment numbers that drove the Kiwi down further from its open price of 0.7470. Now trading at 0.7420, the New Zealand Dollar was also weighed down by dairy prices easing by 1.6% at the latest GlobalDairyTrade auction. Traders now turn to a speech by the Reserve Banks Deputy Governor Grant Spencer for further insight.

BY JOEL HOlMES

Australian Dollar retests 80 U.S. cents


Australian Dollar

AUD / USD

Expected Range

0.7900– 0.8060

Closing out the month of July with gains totalling 4 percent when valued against its US Counterpart, the Australian dollar whilst enjoying a quieter session on Monday has remained well and truly in a position of strength. Etching out 0.2 percent worth of gains yesterday, Manufacturing and Non-Manufacturing PMI' from China had only a muted impact on the domestic unit as investors upheld their laser-like focus on the RBA who meets today. Given no change in the underlying cash rate is expected, their economic outlook along with any perceived shifts towards a tighter policy stance will undoubtedly be a key driver for the AUD. Sensing it all lies ahead, the Australian dollar currently buys 80.01 US Cents.

Great British Pound

GBP / AUD

Expected Range

1.6400– 1.6700

Majors

USD, EUR, JPY

Expected Range

N/A

Commodity currencies were boosted overnight as US crude oil prices rose to two month highs and above $US50 a barrel. Solid Chinese data also saw Chinese Iron Ore jump 8% to eight month highs during Monday trading. Political risk has come to the forefront of investor minds overnight in the United States as further turmoil in the White House as communications director Anthony Scaramucci lasted just ten days The US Dollar Index fell another 0.5% overnight to 92.85 and has closed at its lowest since May 2016. End of month readjustments and a stable European inflation print saw the EUR/USD hit 2 ½ year highs of 1.1845. The US Dollar has also extended its losses against the Japanese Yen, seeing a 0.5% drop overnight to reach overnight lows of 1.1022.

New Zealand Dollar

NZD / USD

Expected Range

0.7450 – 0.7600

The New Zealand Dollar remains largely unchanged when compared to its US counterpart. Again treading water just above the 0.75 mark, the Kiwi traded within a relatively tight range, oscillating between 0.7468 and 0.7522. Again, the main theme of USD weakness remains the driver of direction in the pair. Over in Europe, the New Zealand dollar fell to a two-week low of 0.6344 against the Euro. The Eurozone posted a slight dip in unemployment and stronger inflation which supported the broader narrative of central banks tapering accommodative monetary policy. Across the Tasman, the Kiwi remained static against the Aussie trading overnight at 0.9390. Ahead of NZ unemployment numbers on Wednesday, traders look to the Australian RBA rate statement slated for release today for direction.

BY JOEL HOLMES

US Dollar weakens across the board post GDP


Australian Dollar

AUD / USD

Expected Range

0.7900– 0.8020

Proving to be another monumental week for the Australian dollar, which saw investors successfully navigate additional commentary from the RBA, a domestic inflation print as well as the delivery of key growth metrics from the United States. Spending the majority of the past five days within reaching distance of the 80 US Cents mark, over the coming days investors will be looking to recapture highs of 0.8065 versus its US Counterpart amid hopes that the RBA' August 1st interest rate decision will spur further demand for the AUD as participants look for any indication of a greater willingness to move away from its current easing cycle. Ahead of key manufacturing prints from China this morning the Australian dollar currently buys 79.82 US Cents.

Great British Pound

GBP / AUD

Expected Range

1.6300– 1.6600

Majors

USD, EUR, JPY

Expected Range

N/A

Friday movements were dominated by the release of United States GDP figures for the 2nd quarter of 2017. Despite a solid number at an annualised pace of 2.6% vs expectations of 2.7%, The US Dollar was sold off against G10 currencies. EUR/USD rebounded to see its highest weekly close of 1.1755 since January 2015, supported by broad US Dollar weakness and a stronger German CPI print. USD/JPY hit fresh 6 week lows, tumbling from intraday highs of 111.30 to close at 110.60. The DXY fell 0.6% to close at 93.34 as the CME Fedwatch Tool has reduced slightly to a 47% chance of one further interest rate increase by the Federal Reserve by year end.

New Zealand Dollar

NZD / USD

Expected Range

0.7450 – 0.7600

The New Zealand dollar again pierced the 0.75 mark to open this morning at 0.7509. The Kiwi was strengthened in overnight trading by a weaker US dollar as the broader narrative of a softer greenback was vindicated to an extent by lacklustre US GDP numbers. Oscillating between 0.7494 and 0.7512, the New Zealand Dollar shows no signs of fatigue with the US being in the driving seat to determine direction this week. Locally however Traders will also look to the ANZ business survey for direction with an eye on Wednesday' Q2 Labour market data.

BY BRETT OTTAWA

US Dollar recovered most of its post-Federal Reserve losses


Australian Dollar

AUD / USD

Expected Range

0.7900 – 0.8000

One of the strongest global performers yesterday the Australian dollar broke down key resistance levels when valued against its US Counterpart on Thursday, comfortably breaching the 80 US Cents mark. Despite a week which has been jam packed with key risk events, the AUD has seemingly been on auto-pilot with favourable risk proximities as well as a muted Greenback both providing a solid platform for its push forward. Suggesting there wasn’t a great deal of conviction underlying the climb higher, highs of 0.8065 proved to be relatively short-lived and despite a trading range in excess of 1 US Cents the Australian dollar once again opens in a familiar position of strength, albeit slightly lower than the same time yesterday at a rate of 0.7967.

Great British Pound

GBP / AUD

Expected Range

1.6300 – 1.6450

Majors

USD, EUR, JPY

Expected Range

N/A

The greenback advanced higher overnight against its major counterparts, having reverted most of its post-Federal Reserve losses. The EUR /USD pair reached a high of 1.1776 earlier in the day. Now trading at 1.1676. Against the Pound Sterling the Greenback reached a 24-hour high of 1.3158 before settling around 1.3062. On the US data front last night Durable Goods Orders surged by 6.5% in June, beating expectations of a 3.5% advance. We also saw the release of Goods Trade Balance for the month of June, the trade deficit was of $63.9B, better than previous months $65B. Weekly US jobless claims climbed by 10,000 for the week which came in at 244K, up from previous' week 234K. Looking ahead today the main data release will be US Q2 preliminary GDP with expectations the US economy grew by 1.3% in the three months to June.

New Zealand Dollar

NZD / USD

Expected Range

0.7400 – 0.7550

The New Zealand Dollar retreated in overnight trading after reaching a 26-month high against the US Dollar. Opening this morning at 0.7490, the Kiwi advanced yesterday to as high as 0.7557, spurred on by what traders considered to be a dovish statement from the United States Federal Reserve. As the American session opened overnight however, the Greenback hit back against its detractors clawing its way back on the strength of US durable goods orders and further consideration of the Fed' statement. Across the Tasman, the Kiwi traded within a tight range and opens this morning at 0.94, reflecting the midpoint of the weekly range. Looking ahead to a light domestic economic calendar, direction is expected to be derived from off shore data. In particular, traders will look to US GDP numbers later in the evening.

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