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BY JOEL HOLMES

Geopolitical Risks sees Shift to Safe Haven Currencies


Australian Dollar

AUD / USD

Expected Range

0.7800 – 0.7920

Trading as low as 0.7855 versus its US Counterpart yesterday the Australian dollar has again failed to inspire over the past 24 hours. Having only a modest reaction to CPI and PPI prints from China which both narrowly missed forecast, it has instead been the attempts of Trumps administration to calm fears of a full blown armed conflict with North Korea overnight which has been the largest contributor to underlying currency flows. Opening 0.2 percent lower this morning at a rate of 0.7885, today' session offers little to investors who will instead be forced to wait on tomorrow evenings key US CPI print.

Great British Pound

GBP / AUD

Expected Range

1.6400 – 1.6600

Majors

USD, EUR, JPY

Expected Range

N/A

As Geopolitical risks in North Korea remain at the forefront of investors’ minds, safe haven currencies in the Japanese Yen and Swiss Franc have both seen small favourable movements against G10 currencies. The risk off tone saw USD/JPY at one stage fall below critical support levels of 110.00, reaching its lowest level since June 15 of 1.0957, eventually recovering to 1.0990 in early morning trade. A brief rally on the greenback, despite no clear reasons during early North American trading saw the EUR/USD dipped to a weekly low of 1.1690. Losses were all but erased late in the day as the cross rebounded to a high of 117.60 on close. Markets get a fresh round of data from the North American front as Producer Price Index and unemployment claims are released overnight ahead of Inflation figures on Friday.

New Zealand Dollar

NZD / USD

Expected Range

0.7300 – 0.7400

The New Zealand Dollar advanced this morning against the Greenback after the RBNZ held the official cash rate at 1.75 per cent. The kiwi rose higher on the back of the Reserve Bank's neutral tone in its May statement. This came as some surprise despite previously sluggish economic data and a softer inflation outlook. The RBNZ still believe the next move on interest rates will be up, but not in the foreseeable future. The Kiwi reached a high of 0.7368 against the Greenback. The NZD/USD pair is currently trading at 0.7360. We now expect support to hold on moves approaching 0.7300 while any upward push will likely meet resistance around 0.7430.

BY MICHAEL JUDGE

Australian Dollar Steady – Support at 79 U.S cents


Australian Dollar

AUD / USD

Expected Range

0.7880 – 0.7960

Markets have in most part lacked conviction during the early parts of this week with the only spike in volatility coming off the back comments made by US President Donald Trump who vowed to respond aggressively amid rising tensions between the two nations. Whilst flows mainly favoured the world' safest havens, the Australian dollar has remained in a relatively timid mood dropping belong below the 79 US Cents mark in overnight trade. Opening virtually unchanged this morning at a rate of 0.7913, CPI and PPI numbers from China today are likely to garnish the greatest degree of attention.

Great British Pound

GBP / AUD

Expected Range

1.6350 – 1.6520

Majors

USD, EUR, JPY

Expected Range

N/A

Having bounced from some critical support levels late last week, the Greenbacks near-term direction has been further clouded overnight following comments made by US President Donald Trump. Spurring volatility levels which saw US Stock Markets fall, Trump delivered a warning to North Korea, stating that any threats made to the US would be met with “fire and fury”. In the absence of any economic drivers it has instead been underlying risk settings which has set the tone this week, a move which has favoured a fall in US Treasuries and a rally for the Japanese Yen. With the next two sessions shaping up to be relatively quiet, key CPI figures from the United States on Friday promises to be a key ingredient towards near-term interest rate settings.

New Zealand Dollar

NZD / USD

Expected Range

0.7270 – 0.7370

Another quiet day yesterday in New Zealand with the New Zealand Dollar trading within a tight 26 pip range. The Kiwi reached an overnight high of 0.7369 against the Greenback. All eyes this week will be on Thursdays RBNZ meeting with market expectations the central bank to proffer some relatively dovish direction given low inflation and concerns about the overall Kiwi Dollars strength. The interest rate is expected to remain at 1.75%. There are no data releases scheduled for today. The NZD/USD pair is currently trading at 0.7329. We now expect support to hold on moves approaching 0.7280 while any upward push will likely meet resistance around 0.7430.

BY JOEL HOLMES

Markets quiet – Australian Dollar Tests 79 U.S. Cents


Australian Dollar

AUD / USD

Expected Range

0.7850 – 0.7970

Having digested a flood of economic data from both domestic and foreign sources, the Australian dollar has started the new week in a seemingly steadier position when valued against its US Counterpart. Despite what has at times been at a frantic window for the AUD, investors welcomed a tighter than usual trading band yesterday with Australian dollar drifting between a low of 0.7899 and high of 0.7948 versus the Greenback . With the 80 US cents mark still the near-term topside target, questions remain whether new support can be found at existing resistance. With Trade Balance figures from China taking centre stage today the AUD currently buys 79.10 US Cents.

Great British Pound

GBP / AUD

Expected Range

1.6300 – 1.6600

Majors

USD, EUR, JPY

Expected Range

N/A

Markets were quiet overnight as we saw little movements on the foreign currency front. The U.S Dollar index (DXY) which measures the greenback against six major currencies saw little change, closing up 0.04% at 93.43. USD/JPY continued its upside momentum after the strong employment result last week to hit intraday highs of 1.1090 before pulling back on dovish remarks from FOMC member Kashkari and President James Bullard, the latter stating he doesn’t expect inflation to rise anytime soon. Despite German industrial productions slipping for the month of June, EUR/USD flat lined for the majority of the day and opens this morning at 1.1795.

New Zealand Dollar

NZD / USD

Expected Range

0.7300 – 0.7400

The New Zealand dollar is slightly weaker against the Greenback this morning. Overnight saw the Kiwi reach a high of 0.7416 before settling down around 0.7350. Yesterday on the data front the RBNZ survey of inflation expectations showed a modest dip of 2.1%, down from the previous month 2.2%, a fall in actual inflation. There are no data releases scheduled for today. The NZD/USD pair is currently trading at 0.7355. We now expect support to hold on moves approaching 0.7276 while any upward push will likely meet resistance around 0.7459.

BY JOEL HOLMES

U.S Dollar Gains - Strong Non-Farm Payroll Print


Australian Dollar

AUD / USD

Expected Range

0.7850– 0.7970

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

Expected Range

1.6300– 1.6600

Majors

USD, EUR, JPY

Expected Range

N/A

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

Expected Range

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.

BY JOEL HOLMES

Markets Steady ahead of Non-Farm Payrolls


Australian Dollar

AUD / USD

Expected Range

0.7900– 0.8000

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.

Great British Pound

GBP / AUD

Expected Range

1.6400– 1.6700

Majors

USD, EUR, JPY

Expected Range

N/A

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.

New Zealand Dollar

NZD / USD

Expected Range

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.

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