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By Joel Holmes

Optimism bolstered for the U.S Economy


Australian Dollar

AUD / USD

Expected Range

0.7850 – 0.7970

The Australian dollar enjoyed mixed fortunes through trade on Wednesday rallying throughout domestic trade before profit taking and upbeat U.S macroeconomic data enabled a correction and reversal of local gains. The AUD found support early following stronger than anticipated Q2 construction; the strong read acts as a positive precursor to next week' GDP print and hints, possibly, at an uptick in employment and consumer spending. Touching intraday highs at 0.7997 the AUD then met selling pressures as investors took profit and forced the unit gradually lower. Moving back through 0.7950 upbeat U.S preliminary GDP and employment data helped fuel a Greenback rally as investors unwind short positions; touching intraday lows at 0.7893 the AUD opens this morning buying 0.79 U.S cents as attentions turn domestic Private Capital Expenditures and a key U.S inflation print for direction into Non-farm payroll numbers Friday.

Great British Pound

GBP / AUD

Expected Range

1.6100 – 1.6400

Majors

USD, EUR, JPY

Expected Range

N/A

US equity markets rose for a fourth consecutive day whilst the world' reserve currency continued its rebound from levels not witnessed in more than two years. In what was mainly data lead story overnight, optimism which surrounds the growth trajectory of the US economy was bolstered following the release of a second-quarter GDP print which showed growth had accelerated at its fastest pace in two years, momentum supported mainly by stronger than expected household spending and gains in business investment. Rallying by 0.4 percent, the Greenback has outperformed across the board over the past 24 hours with the Euro subsequently losing 0.7 percent. Whilst the euro opens lower this morning at a rate of 1.1890, in what' likely to remain a common theme towards the backend of this week, US non-farm payrolls on Friday will again be looked towards as a key driver of US dollar price activity.

New Zealand Dollar

NZD / USD

Expected Range

0.7150 – 0.7250

The New Zealand dollar shifted gradually lower throughout trade on Wednesday relinquishing early gains and moving back below 0.72 U.S cents. Commentary from RBNZ Governor Graeme Wheeler placed early pressure on the local unit as the central bank figurehead suggested a “lower NZD was needed”. While such sentiment did not surprise markets, when coupled with stronger than anticipated US ADP non-farm payroll data and preliminary GDP numbers the Kiwi was forced to intraday lows at 0.7190. Having maintained wider ranges between 0.7190 and 0.73 throughout the past fortnight a move below this point of key technical support could signal a wider correction and deeper reversal back toward 0.70 and 0.69. Attentions now turn to domestic business confidence and key U.S inflation data for direction through trade on Thursday.

By Joel Holmes

Australian Dollar Higher – Could Retest 80 U.S Cents


Australian Dollar

AUD / USD

Expected Range

0.7900 – 0.8000

The Australian Dollar is stronger this morning when valued against the Greenback. The Aussie reached an overnight high of 0.7983. Yesterday we saw the release of monthly New Home Sales data for July. Australian new home sales tumbled to a four-year low in July, driven by a 15.7 per cent decline in apartment sales. While sales of detached housing fell by 0.4 per cent. Looking ahead today Australia will release monthly Building Approvals and Quarterly Construction Work Data for July. The AUD/USD pair is currently trading at 0.7952. We now expect support to hold on moves approaching 0.7930 while any upward push will likely meet resistance around 0.7990.

Great British Pound

GBP / AUD

Expected Range

1.6100 – 1.6400

Majors

USD, EUR, JPY

Expected Range

N/A

Markets were sent into turmoil yesterday morning after news broke of a missile fired by North Korea which flew over Japan. As expected there were large movements into safe haven currencies such as the Swiss Franc and Japanese Yen while waiting for confirmation on further news from the UN Security Council. USD/JPY recovered from three year lows overnight of 1.0830 after a flight initially into the Japanese Yen, finishing the day at 1.0960. Recoveries were seen overnight as the Euro surged above 1.20 for the first time since January 2015 and hit an intraday high of 1.2070, helped by a solid German GfK consumer climate reading and French consumer spending results overnight. Momentum was stalled, eventually pulling back to 1.1970 against the greenback in the North American session, helped by a solid increase in United States CB Consumer Confidence levels. Key events to watch overnight will be the release of the latest ADP Non-Farm Employment figures along with Prelim GDP for the 2nd quarter of 2017 in the United States.

New Zealand Dollar

NZD / USD

Expected Range

0.7200 – 0.7300

The New Zealand Dollar seesawed against the Greenback during yesterday' session, having initially dropped 40 pips in early morning trade to a low of 0.7218 as news broke of missiles being fired by North Korea over Japanese airspace. The pair clawed back losses and with 73c in sight the Kiwi rallied to a high of 0.7298 on the back of broad based USD weakness. On the data front today sees the release of low tier data Building Consents, we can expect to see immediate resistance around the 0.7300 level with support sitting at 0.7220.

By Joel Holmes

Risk off trade – Geopolitical tensions rise in North Korea


Australian Dollar

AUD / USD

Expected Range

0.7850 – 0.7970

Driven by broad-based US Dollar weakness and improved risk appetite the Australian Dollar is stronger this morning when valued against the Greenback. The Aussie settled late in the US session trading at its highest level since August 4th. The Aussie reached touched an overnight high of 0.7973. The Australian macroeconomic calendar will have little to offer again this week with no scheduled data releases today. Locally all eyes will be on tomorrows monthly Building Approvals for July. The AUD/USD pair is currently trading at 0.7924. We now expect support to hold on moves approaching 0.7930 while any upward push will likely meet resistance around 0.7990.

Great British Pound

GBP / AUD

Expected Range

1.6200 – 1.6500

Majors

USD, EUR, JPY

Expected Range

N/A

Macroeconomic data was light overnight, The U.S. Dollar remaining weak post last weekend' Jackson Hole Symposium. The U.S Dollar index (DXY) which is measured against six major currencies was down 0.15% to 92.20 at the time of writing. The main movements were seen this morning as it was confirmed by Japanese Prime Minister Shinzo Abe that North Korea fired a missile which flew over the region of Japan. This caused immediate moves back into traditional safe haven currencies such as the Swiss Franc and Japanese Yen. Investors sold off the USD/JPY cross immediately from 1.0935 to 1.0862 as Japanese officials are due to meet for an emergency meeting this morning. It was better news for the Euro as it pushed to two year highs capping out at 1.1982 in its attempts to push through 1.20. Markets will be focused on further comments in Asia this morning as we look towards United States CB Consumer confidence this evening.

New Zealand Dollar

NZD / USD

Expected Range

0.7200 – 0.7300

Yesterday lacked any data of economic significance and kept the NZD/USD within a range of 0.7230 and 0.7262. Fonterra Cooperative Group said its New Zealand milk collection was up by 10.4 per cent for the first two months of the season however, they reported that a small number of farms were flooded after some heavy down pours in July with farmers now facing challenging conditions. The news did little to move the NZD/USD pair and with a tick-up in US treasury bond yields this has kept a lid on high yielding currencies advancing further. On the technical front we see immediate support around 0.7220 and 0.7190. Resistance is sitting around 0.7260 followed by 0.7300.

By Joel Holmes

US Dollar weaker – Yellen fails to deliver policy update


Australian Dollar

AUD / USD

Expected Range

0.7900 – 0.8000

The Australian dollar advanced against the greenback on US Fridays session. The Aussie reached a session high of 0.7948 trimming its weakly losses. The Australian macroeconomic calendar was empty last week, and will remain light in the upcoming few days ahead with monthly Building Approvals for set for release on Wednesday. The AUD/USD pair is currently trading at 0.7946. We now expect support to hold on moves approaching 0.7910 while any upward push will likely meet resistance around 0.7960.

Great British Pound

GBP / AUD

Expected Range

1.6100 – 1.6400

Majors

USD, EUR, JPY

Expected Range

N/A

Markets were driven by a lack of monetary policy remarks by Fed Reserve Chair Janet Yellen at the Jackson Hole Symposium over the weekend. The US Dollar index dropped immediately to three week lows of 92.80 as markets were disappointed from a lack of fresh news and closed 0.72% lower at 92.52. The Euro was one of the best performing currencies on Friday hitting twenty month highs of 1.1950 as ECB President Mario Draghi refrained from further rhetoric to talk down the higher common currency. Following the flow of US weakness, USD/JPY fell from intraday highs of 1.0985 to close at 1.0910. It will be a quiet 24 hours with little on the economic docket as we look towards ADP Non-Farm and Prelim GDP figures Wednesday evening out of the United States.

New Zealand Dollar

NZD / USD

Expected Range

0.7200 – 0.7300

The New Zealand dollar advanced against the greenback on US Fridays session after the Jackson Hole speeches of Janet Yellen and Mario Draghi which drove the USD weaker. The Kiwi trading higher this morning reached a top of 0.7253. A fairly quiet start to the week with no scheduled macroeconomic data releases until Wednesday with the release of monthly Building Consents for July. On Thursday we will see the release of ANZ Business Confidence. The Kiwi finished the week flat against the Aussie 1.0945 (0.9136) and weaker against the Euro 0.6071 (1.6471).

By Matt Richardson

All eyes on Jackson Hole and key Central Bank Commentary


Australian Dollar

AUD / USD

Expected Range

0.7830 – 0.8030

Whilst remaining steady, the Australian dollar struggled to advance during Thursday' session, idling between a slim trading band when valued against its US Counterpart. Limiting its momentum, investors have become increasingly cautious in the lead up to this evening' Central Bank gathering with political wrangling over the US debt ceiling also keeping a number of participants sidelined. During a window which has generally supported the Greenback, tonight' Jackson Hole Symposium has the potential to dramatically change the near-term make-up of markets. Opening marginally lower the Australian dollar currently buys 78.97 US Cents.

Great British Pound

GBP / AUD

Expected Range

1.6030 – 1.6330

Majors

USD, EUR, JPY

Expected Range

N/A

The U.S Dollar steadied through trade on Thursday recouping a small portion of the losses suffered through trade on Wednesday following Presidents Trumps threats to NAFTA and suggestion of a wider government shutdown. As focus shifted back to macroeconomic indicators ahead of the Jackson Hole Symposium the dollar moved back through 1.09 JPY to touch intraday day highs at 1.0960 while the Euro moved through 1.18 to 1.1784. Driven by a reasonably stable macroeconomic set the dollar found momentum as investors square positions ahead of key commentary from Fed Chair Janet Yellen and ECB President Mario Draghi. Both central bank figureheads are due to address the Jackson Hole Symposium today with analyst closely attuned to the rhetoric and fundamental undertone of their respective commentaries. Should Yellen drive home the Fed' desire to push through a December rate hike we may see some dollar strength and a shift in focus back to the Federal Reserve monetary policy.

New Zealand Dollar

NZD / USD

Expected Range

0.7130 – 0.7280

The New Zealand dollar remains little changed against the greenback on Thursday. Overnight the kiwi reached a high of 0.7235. There has been little news reported this week, a light macroeconomic calendar. Yesterday New Zealand' trade balance data surprised to the upside in July as it rose to $85m, while economists expected a deficit of $200m. The market now turns its attention to the upcoming Jackson Hole meeting this evening. The NZD/USD pair is currently trading at 0.7204. We now expect support to hold on moves approaching 0.7180 while any upward push will likely meet resistance around 0.7330.

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