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AUD / USD
The Australian Dollar opens weaker this morning against the Greenback on the back of strong US Jobs report on Friday. The Aussie reached a low of 0.7914 before settling around 0.7930. Last Friday on the local data front Australia's retail sales for the month of June came in at 0.3%, above market expectations 0.2%.The upbeat retail sales data overshadowed the downward revision of the GDP forecast by the RBA. A fairly quiet day expected with a bank holiday in the state of New South Wales. On the data front today will see the release of ANZ Job Advertisements at 11.30 AEST. The AUD/USD pair is currently trading at 0.7933.
Great British Pound
GBP / AUD
USD, EUR, JPY
Recent U.S. Dollar weakness was reversed after a strong Non-Farm payroll print for the second consecutive month. A boost in jobs of 209,000 vs 170,000, saw the U.S dollar index recover from fifteen month lows and up 0.7% for the day. Pushing the dollar higher was the announcement by Whitehouse economic advisor Gary Cohn, who suggested the corporate tax rate should be cut by at least a third to compete with developed countries. Market expectations of any further interest rate hikes after the NFP print was marginally higher with the CME Fedwatch tool pricing a 55% chance of an increase of 0.25%. EUR/USD bullish run came to an end, erasing weekly gains after a strong dataset from the United States, pulling back from a weekly high of 1.1906 to close at 1.1725. USD/JPY gains were seen during the Asian session and lifted post NFP to rally to a one week high of 111.03. Major news items are limited this week as we look towards US inflation figures on Friday.
New Zealand Dollar
NZD / USD
0.7350 – 0.7450
The New Zealand Dollar fell against the Greenback on Friday on the back of upbeat US Jobs report as US jobs growth topped 200,000 for a second straight month. The New Zealand Dollar hit a low of 0.7396 during Friday' session. This week on the local data front it all kicks off on Monday with Quarterly Inflation Expectations. However all eyes will be on Thursday' RBNZ Monetary Policy Statement. All 11 economists polled by Bloomberg expect the central bank to keep rates at a record low 1.75 per cent at Thursday's review. The NZD/USD pair is currently trading at 0.7411.
The Australian Dollar traded in a tight range in overnight trading, oscillating between 0.7914 and 0.7964 to open this morning at 0.7951. Despite lacklustre PMI numbers coming out of the US, the Aussie struggled to capitalise and treaded water within this range ahead of a jammed-packed Friday that sees action on both sides of the pair. First cab off the rank lands with the RBA and their monetary policy statement. Considering the broader context of the RBA' cash rate policy stance, any guidance will be under heavy scrutiny by traders. Following the statement, the Aussie looks to retail sales numbers for further direction. To close out the week, the Greenback turns to unemployment data for further momentum in the exchange rate.
The U.S. dollar was largely unchanged despite ISM Non-Manufacturing PMI disappointing the market after missing expected growth targets for the month of 53.9 vs 57.4. Both Services PMI and Unemployment claims were steady as the U.S Dollar index fell slightly by 0.1% for the day. EUR/USD was slightly higher for the day due to greenback weakness, just failing in its attempt to reach 1.19, with the Euro supported by an uptick in European retail sales for the month of June. USD/JPY dropped to session lows from 110.80 to an intraday low of 109.90 with the 110 to be tested this evening with the release of non-farm employment change and the latest unemployment rates in the United States.
0.7400 – 0.7500
The New Zealand Dollar traded within a tight band in overnight trading hitting a high of 0.7450 and a low of 0.7390. Opening this morning at 0.7435, the Kiwi' value remains virtually unchanged from yesterdays’ reading. With a quiet day ahead in store on the local economic calendar, the New Zealand Dollar turns to a packed Friday during the American session with non-farm employment numbers due for release. Elsewhere, the Kiwi posted modest gains and losses across the board and mostly held its value against the major currencies. Trading against the GBP slightly higher at 0.5662, the Kiwi benefitted from a dovish rate guidance from the Bank of England. Across the Tasman, the Kiwi remains stagnant at 0.9350 ahead of the RBA' policy statement slated for release later today.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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