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BY JOEL HOLMES

Risk Off Sentiment - Australian Dollar below 79 US Cents


Australian Dollar

AUD / USD

Expected Range

0.7850 – 0.7950

The Australian dollar enjoyed mixed fortunes through trade on Thursday advancing early on stronger than anticipated labour market date before renewed U.S dollar strength forced the currency back below 0.79 U.S cents. Bolstered early the AUD touched intraday highs at 0.7964 after employment change data showed near on 30,000 jobs were added to the economy throughout July while the unemployment rate fell to 5.6%. The upbeat print marks the fifth consecutive month of labour market improvements and has some investors calling for the RBA to revise its policy outlook, however the spectre of stagnant wage growth capped gains and a renewed push toward 0.80 stalled. Moving lower through offshore trade the Aussie broke below 0.79 on renewed demand for haven assets as continued White House instability and Spanish Terror attacks sapped investors’ appetite for risk. Currently buying 0.7887 U.S. cents attentions now turn to offshore stimuli for direction into the weekend as we anticipate support at 0.7830 with resistance again on moves approaching 0.7960/0.80.

Great British Pound

GBP / AUD

Expected Range

1.6200 – 1.6400

Majors

USD, EUR, JPY

Expected Range

N/A

The Greenback saw gains overnight, its biggest upside movements after the release of July minutes by the ECB and a general risk off tone. The DXY saw positive territory and is up 0.23% for the day, and looks to continue its run up to 94.00. Positive upside recently by the Euro was halted as the ECB minutes showed concerns of recent strength in the currency, causing the EUR/USD cross to drop 1.2% from tops of 1.1795 to an intraday low of 1.1665. The Greenback was weaker against the Japanese Yen as Dallas Fed President Robert Kaplan warned the market to be patient on further interest rate rises, as they wait to see further progress on waning inflation figures. Further bids into the Yen were seen after a terrorist attack in the centre of Barcelona, with risk off tones pushing the USD/JPY position below 110 for the day and continues to slide on open to 1.0940 on open this morning.

New Zealand Dollar

NZD / USD

Expected Range

0.7250 – 0.7350

The New Zealand dollar moved marginally lower through trade on Thursday on renewed demand for safe haven currencies. News of a terror attack in Spain and ongoing uncertainty within the Trump administration sapped investors’ appetite for risk and forced the NZD below 0.73 U.S cents. Having touched intraday lows at 0.7281 the Kiwi opens this morning buying 0.7285 as attentions remain offshore with direction into the weekend driven primarily by risk flows.

BY JOEL HOLMES

Australian Dollar Trades Above 79 US Cents


Great British Pound

GBP / AUD

Expected Range

1.6100 – 1.6400

Majors

USD, EUR, JPY

Expected Range

N/A

The greenback rally seen this week took a turn for the worse overnight, reversing gains seen over the past 48 hours. The selloff started with the release of FOMC minutes in the North American session as members were split over the future path of interest rate rises. The main concerns over low inflation levels, currently below the target rate of 2% look to be a key factor in movements in the U.S Dollar with the next round of CPI figures out September 13th. Markets are currently pricing in very little chance of a hike in next month' meeting, with a 50% chance by year end. The DXY which measures a basket of currencies was weaker and has lost 0.38% for the day. The EUR hit fresh highs of 1.1775 this morning after FOMC minutes. Earlier the EUR saw lows of 1.1680 after it was noted ECB President Mario Draghi would not be speaking at Jackson Hole on monetary policy outlook. USD/JPY fell to support at the 110 handle overnight, as investors look towards the release of unemployment claims this evening.

New Zealand Dollar

NZD / USD

Expected Range

0.7250 – 0.7350

The New Zealand dollar rallied through 0.73 U.S. cents during trade on Wednesday as wide spread U.S dollar weakness fueled renewed demand for commodity linked currencies. Bouncing off key technical supports near 0.7230 the Kiwi surged to intraday highs at 0.7320 as investors corrected U.S monetary policy expectations following the Federal Reserve' release of if July FOMC meeting minutes. Concerns surrounding inflation and the possibility of revisions in how the key macroeconomic metric is measured forced analysts to downplay the possibility of a December rate hike and pushed the greenback lower across the board. Opening this morning buying 0.7308 U.S cents attentions now turn to domestic PPI data as a precursor for consumer lead inflation and U.S unemployment claims for direction throughout trade on Thursday.

BY JOEL HOLMES

Greenback Recovery ahead of FOMC Minutes


Australian Dollar

AUD / USD

Expected Range

0.7750 – 0.7875

The Australian dollar moved lower through trade on Tuesday marking a second consecutive daily depreciation; testing supports at 0.7850 and 0.7830. The RBA' latest minutes offered little to excite investors and did little to inspire any upward AUD momentum instead leaving the currency at the mercy of offshore stimuli. As risk appetite returns to the market the U.S dollar recovery continued and found additional support in upbeat and stronger than anticipated retail sales data. Forcing the Aussie through one month lows at 0.7809 the greenback touched three week highs. Opening this morning buying 0.7819 U.S cents attentions now turn to domestic wage price growth and a heavy U.S macroeconomic docket headlined by FOMC meeting minutes for direction through midweek trade.

Great British Pound

GBP / AUD

Expected Range

1.6300 – 1.6600

Majors

USD, EUR, JPY

Expected Range

N/A

A lift in United States Retail Sales for the month of July by 0.6% saw the U.S. Dollar advance to its highest level in four weeks. Supported by a selloff in safe haven currencies, The US Dollar index (DXY) advanced by another 0.4%. Supportive of the rally was the latest Empire State Manufacturing Index reading which jumped to its highest level in three years. With the broader rally on the Greenback, Euro pulled back to support at the 1.17 handle. USD/JPY rallied to a high overnight of 110.85 after a reversal in risk sentiment and up 1% for the day. Markets look ahead to the release of FOMC meeting minutes this evening.

New Zealand Dollar

NZD / USD

Expected Range

0.7180 – 0.7280

The New Zealand dollar moved lower through trade on Tuesday as upbeat U.S retail sales data and a renewed appetite for risk saw investors buy back into the world' base currency. With little domestic data on hand to drive direction the kiwi suffered at the hands of easing geopolitical tensions and an increasing demand for riskier assets, such as U.S stocks. Consolidating moves below 0.73 the NZD touched intraday lows at 0.7229 and opens this morning buying just 0.7233 U.S cents. Attentions now turn to a raft of U.S macroeconomic data and FOMC meeting minutes for direction through Wednesday. An upbeat print and hawkish Federal Reserve could prompt a move back below 0.72 and test of supports at 0.7190.

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.

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