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BY JOEL HOLMES

Australian Dollar Lower ahead of Monetary Policy Minutes


Australian Dollar

AUD / USD

Expected Range

0.7800 – 0.7900

The Australian dollar having enjoyed a brief early morning rally moved lower through trade on Monday nearing one month lows and touching 0.7848. With little domestic data on hand to drive direction the AUD succumb to renewed USD strength and an uptick in risk appetite as investors’ fears eased in the wake of lessening brusque bombast between Trump and Pyongyang. As the war of words dissipated over the weekend markets looked to correct the run on Safe Havens and sold down JPY and CHF holdings to buy back into stocks and the US dollar forcing the Aussie toward key technical supports at 0.7830/50. Opening this morning at 0.7853 attentions now turn to the RBA' meeting minutes and U.S retail sales for direction through Tuesday.

Great British Pound

GBP / AUD

Expected Range

1.6400 – 1.6600

Majors

USD, EUR, JPY

Expected Range

N/A

The USD was one of the best performing currencies overnight as movements were seen out of safe haven currencies as geopolitical risk waned. The U.S. Dollar Index (DXY) was up 0.38% at the time of writing as both Japanese Yen and Swiss Francs lost ground against the Greenback. The U.S Dollar also saw gains as Fed Reserve Bank of New York President William Dudley was more hawkish on monetary policy as he is still supportive of another hike this year along with the trimming of the current balance sheet in September. The Euro saw selling pressure to start the week, falling through support at 1.1800 to finish the North American session at 1.1775. Bids were favoured higher on the USD/JPY cross after recovering from last week losses, seeing intraday highs of 1.0978. With major markets in Europe observing a public holiday, movements are expected to be light heading into United States Retail sales.

New Zealand Dollar

NZD / USD

Expected Range

0.7200 – 0.7320

The New Zealand dollar slipped back below 0.73 U.S cents through trade on Monday as investors unwound safe haven plays and bought back into stocks and the US dollar. Tensions between the US and North Korea appeared to have eased over the weekend with the war of words that plagued markets last week abating, prompting markets to sell down JPY and CHF holdings. Having touched intraday highs at 0.7322 following stronger than anticipated retail sales the NZD shifted lower as risk appetite returned and markets looked to correct the recent greenback sell off. Touching intraday lows at 0.7286 attentions remain with geopolitical developments and U.S retail sales for direction through Tuesday.

BY JOEL HOLMES

Disappointing U.S. Inflation sends U.S. Dollar lower


Australian Dollar

AUD / USD

Expected Range

0.7850 – 0.7950

The Australian Dollar edged marginally higher into the close on Friday briefly edging back through 0.79 U.S cents. With little domestic data on hand to drive direction the AUD remained at the mercy of wider risk flows and touched intraday lows at 0.7844. As global political tensions escalate investors continued to seek haven assets bolstering demand for the CHF and JPY dampening demand for the AUD as a carry trade option. However weaker U.S inflation data helped fuel a late upturn and drove the AUD through 0.79 to touch intraday highs at 0.7908. Consumer prices rose at a slower pace than expected in July stifling investors’ expectations for multiple Federal Reserve rate hikes into the end of the year. Opening this morning buying 0.7889 U.S cents attentions now turn to Tuesday' RBA meeting minutes and Thursday' labour market data for direction through the week ahead.

Great British Pound

GBP / AUD

Expected Range

1.6400 – 1.6600

Majors

USD, EUR, JPY

Expected Range

N/A

Poor inflation figures out of the United States on Friday evening sent the U.S. Dollar lower. The Core CPI reading of 0.1% for the month of July saw dovish FOMC member Neil Kashkari remark that the recent number is enough to hold off on any further interest rate hikes till inflation accelerates. The U.S Dollar Index finished 0.34% lower for the day with Fed fund futures now pricing only a 38% chance of an interest rate rise by the FOMC in December. EUR/USD railed higher to see intraday highs of 1.1845 after the CPI report before closing the week higher for the fifth week in a row above support at 1.18. Geopolitical risk continues to be a major play in currency movements as a round of Chinese data takes center stage today.

New Zealand Dollar

NZD / USD

Expected Range

0.7250 – 0.7350

The New Zealand Dollar rallied into the close on Friday bolstered by softer than anticipated U.S inflation data. Having touched intraweek lows at 0.7258 the Kiwi' weekly decline stalled as consumer prices in the U.S advanced at a slower pace than anticipated throughout July. The softer print forced a wider USD sell off and allowed the New Zealand dollar to move back through 0.73. Attentions now turn to today' domestic retail print for direction into the start of the week.

BY JOEL HOLMES

Safe Haven Currencies in Demand – AUD below 79 U.S. Cents


Australian Dollar

AUD / USD

Expected Range

0.7800 – 0.7900

Investors have opted to dump the Australian dollar over the past 24 hours, seemingly losing their appetite to hold assets deemed riskier in nature. With US President Donald Trump stating overnight that his earlier warnings to North Korea may not have been tough enough, global markets have been engulfed by a broader shift which has benefitted the world' safest and deepest pockets. Whilst the AUD/USD pair still sits above key resistance, a move below 0.7830 would expose the currency to additional selling pressures. Mindful that risk sentiment will play an important part during the back end of this week, a US CPI print this evening will also be closely observed. Opening on the back foot the Australian dollar currently buys 0.7873.

Great British Pound

GBP / AUD

Expected Range

1.6400 – 1.6600

Majors

USD, EUR, JPY

Expected Range

N/A

No change to geopolitical risks overnight which sit at heightened levels this week. Both Equities and the U.S. Dollar saw downside movements after Trumps “Fire and Fury” threats. The S&P 500 down 1.45%, also following suit was the the Dow 0.93%, as the USD/JPY cross was pummelled to eight week lows in a flight to the safe haven currency. USD/JPY is expected to test 1.09 in low liquidity as a bank holiday in Japan is observed. EUR/USD once again pulled lower to test support at 1.17 and erased all gains to pull higher after a disappointing PPI reading in the United States. Investors turn their attention to the anticipated inflation reading this evening in the United States which could have an effect on current market pricing for any further interest rate hikes by the Federal Reserve this year.

New Zealand Dollar

NZD / USD

Expected Range

0.7200 – 0.7300

The New Zealand Dollar is weaker this morning when valued against the Greenback reaching an overnight low of 0.7251, down from the previous day' high of a 0.7368. On Thursday the Kiwi took another hit but from the central banks RBNZ Governor Graeme Wheeler, which unsurprisingly held the official cash rate at 1.75%, made it very clear during his press conference he is not happy with the current strength of the Kiwi dollar. Today there is little to no macroeconomic data scheduled. Attentions turn to the US with all eyes on July CPI figures. The NZD/USD pair is currently trading at 0.7265. We now expect support to hold on moves approaching 0.7250 while any upward push will likely meet resistance around 0.7360.

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.

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