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AUD / USD
0.7140 - 0.7220
During a typically uneventful holiday interrupted session yesterday the Australian dollar flat-lined when valued against its US Counterpart. Having traded to its lowest point in six months during December, a strengthening Greenback once again proved to be its downfall in lead up to Christmas with key economic indicators from the world' largest economy painting an overall optimistic picture for 2017. Slumping below the 72 US Cents mark the Australian dollar opens this morning lower as it currently buys 71.82 US Cents.
Great British Pound
GBP / AUD
1.7040 - 1.7150
Whilst broader moves have been very much limited over the past 24 hours, the Great British Pound has struggled to find any upward support when valued against the Greenback this month. With the Sterling' push towards recapturing ground at the 1.2300 mark failing, a push higher particularly this past week has resulted in a fading rally. With no economic announcements expected this week, it will be the role of equity markets to support sentiment as currencies drift ahead of conditions which aren’t expected to normalise until the New Year. Opening lower versus the US dollar at a rate of 1.2276, the Sterling is marginally stronger versus the Australian dollar (1.7089) and the New Zealand dollar (1.7823).
USD, EUR, JPY
The US Dollar advanced through trade on Tuesday buoyed by an uptick in housing data and continued expectations for tighter monetary policy throughout 2017. House prices in metropolitan areas rose at a faster pace than was expected in October, consolidating gains seen through September and underpinning suggestions the economy is on track. Moving back through 117 JPY the Greenback stopped short of ten month highs touching 117.61 while the Euro maintained a tight 30 point trading band in thin holiday trade. Despite the lack of volume the dollar' upside trajectory remains intact as investors continue to draw on expectations a Trump presidency and a renewed Washington will drive inflation and foster domestic growth. Increasing fiscal stimulus is expected to put pressure on the Fed and FOMC to raise borrowing costs at a faster pace in 2017 and that in turn is forcing treasury yields higher ensuring the Dollar remains well bid. With little of note on the docket today attentions will be turned to U.S consumer confidence numbers and a return to full trade as all markets re-open following the Christmas break.
New Zealand Dollar
NZD / USD
0.6840 - 0.6950
The New Zealand dollar has enjoyed a period of consolidation through the Christmas holiday period with investors still mainly favouring a shift back into the world' reserve currency. With the US dollar still sitting at a 14-year high, driven mainly by the promise of higher interest rates over the coming 12 months as well fiscal assistance from president-elect Donald Trump, consumer sentiment along with the performance of global equity markets has kept the Kiwi' value in tact amid thin trading conditions. Opening virtually unchanged the New Zealand dollar buys 68.86 US Cents.
0.7180 – 0.7240
The Australian dollar has once again struggled to keep its heads above water when valued against its US Counterpart over the past 24 hours. Briefly dipping below the critical 72 US Cents mark, a lower Greenback was not enough to stop the Aussies slide on Thursday as asset classes deemed riskier in nature tracked lower across the board. Attributing the majority of the declines to an iron ore price which lost a staggering 3.8 percent the Australian dollar opens in a seemingly vulnerable position this morning at a rate of 0.7209. In what' now expected to be a period of low liquidity as markets wind down for Christmas there remains one more set of macro prints from the United States evening.
1.6980 - 1.7100
Testing fresh one-month lows when valued against its US Counterpart the Great British Pound has come under renewed selling pressure overnight, pressure mainly applied from a raft of US Data prints. Having traded as high as 1.2378 earlier in the piece, the Sterling has since unravelled with domestic flows offering no support to the Sterling. With the holiday season now on the markets door step Current Account numbers this evening offer investors one last opportunity to trade a domestic risk event. Weaker versus the Greenback at a rate of 1.2288 the Sterling is lower also versus both the Aussie (1.7045) and the Kiwi (1.7798).
The Greenback strengthened yesterday when valued against a basket of major currencies, the US Dollar Index surged hitting its highest level in thirteen years. The main driver behind the force was an interest rate hike by the US Federal Reserve and in an accompanying statement signalled of further hikes in 2017. EUR/USD is once again lower buying at 1.0415 assisted by encouraging U.S data, weekly jobless claims fell by more than expected last week along with the Philadelphia manufacturing index, NY Empire State and Markit Manufacturing all coming in above forecast. USD/JPY has again soared hitting 10-month highs of 118.66 overnight, the pair has slightly retreated since but a bullish trend is still in place. The Bank of Japan will meet on December 18, and is expected to leave interest rates unchanged at -0.10%. Despite a sluggish economy, the bank has been hesitant to step in and ease policy, as negative rates have done little to kick-start economic growth or raise anaemic inflation levels.
0.6880 – 0.6930
Trading between a low of 0.6887 and a high of 0.6925 when valued against its US Counterpart, the New Zealand dollar picked up some marginal gains versus the world' reserve currency overnight as data prints from the world' biggest economy painted a mixed economic picture. Whilst demand for the Greenback did soften, trading conditions over the past 24 hours have remained light with investors instead preferring to sit on the sidelines given the lack broader participation. Overshadowing a positive GDP print locally yesterday which showed New Zealand' economy expanded by 1.1 percent during the third quarter of this year, flows through to the end of 2017 remain set to be dominated by the performance of the Greenback. Stronger the Kiwi currently buys 69.04 US Cents.
0.7170 – 0.7340
The Australian dollar offered little to excite investors through trade on Wednesday failing to make significant inroads into last week' losses and struggled to break outside a tight 40 point range. Touching intraday lows at 0.7241 the Aussie remains well supported on moves approaching 0.7230 however deeper downward corrections remain possible as a bearish trading bias appears to be forming. Concerns surrounding U.S and Chinese relations and the possible introduction of protectionist trade policies are weighing heavy on the AUD as Australian resources remain a key link in the Chinese supply chain. Further, expectations strong U.S growth and tighter monetary policy continue to promote U.S Treasury Yields and a bullish Greenback. With little macroeconomic data on hand today attentions turn to the U.S economic docket for direction amid thin holiday trading.
1.6950 – 1.7150
The Great British Pound remained relatively range bound through trade on Wednesday struggling to break above 1 month lows in thin trading conditions. Having remained largely immune to swings in macroeconomic indicators investors largely ignored a marginal increase in Public Sector Borrowing instead focussing on the possibilities associated with a hard Brexit. Easing concerns throughout October and November helped the Pound hold onto gains in the face of a relentless USD rally however markets and investors seemed to finally relent last week when the Fed announced projections for 3 interest rate hikes through 2017 forcing the GBP lower. Having lost near three percent in the week to Wednesday Cable currently trades at 1.2354 having touched 1.2330 overnight. Attentions now turn to Key U.S data sets and Brexit chatter with analyst looking to PM Theresa May and any indication she will divert from her planned March implementation of Article 50 and exit negotiations.
The U.S Dollar edged lower through trade on Wednesday slipping off 14 year highs as profit taking and positioning ahead of key U.S data sets dominated directional flows. With minimal macroeconomic data and a distinct lack of central bank commentary on hand to drive sentiment the Greenback suffered technical adjustments as markets prepare for U.S GDP data, durable goods orders and the holiday season ahead. Moving back below 118 JPY the USD touched intraday lows at 117.12 while the Euro found support bouncing off 14 year lows and moved back above 1.04 to touch 1.0450. The Dollar index moved a quarter percent lower through Wednesday having touched its highest level since 2002 on Tuesday. Investor' attentions now shift to the raft of headline U.S macroeconomic indicators, while rising concerns surrounding the stability of Italian bank Monte Dei Pashchi Di Siena continue to weigh on the Euro.
0.6840 – 0.6980
Much likes its antipodean counterpart the New Zealand dollar failed to mount a recovery against the week' losses and edged lower touching intraday lows at 0.6898. With little macroeconomic data on hand technical positioning ahead of Key domestic and U.S data sets dominated the directional tone and forced the Kiwi through 5 month lows. The NZD has suffered a heavy sell off in the week following the Fed' surprise monetary policy shift and move toward a tighter policy base and remains vulnerable to further downward moves as a bearish trading channel begins to open. With attentions today turning to 3<sup>rd</sup> quarter GDP number and key U.S macroeconomic indicators investors will be watching supports at 0.69 and 0.6845 for signs a deeper correction is at hand.
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