Compare to bank
AUD / USD
0.7560 – 0.7760
The Australian Dollar was fuelled yesterday by the largest trade balance surplus since records begin in 1971. Yesterday' reading of a $3.51bn trade surplus surprised markets, driving the Aussie through November 2016 resistance levels of 0.7620. Less likely now of a 2nd contraction in GDP figures and supporting the likelihood of our Triple A credit rating left intact, the AUD/USD topped out at 0.7696 in overnight trading and opens this morning above support at 0.7660. Attention turns to United States Non-Farm Employment figures this evening before heading into next week' RBA interest rate decision where it is expect interest rates will remain on hold for the month of February.
Great British Pound
GBP / AUD
1.6200 – 1.6700
The Great British Pound is weaker today when valued against its US counterpart falling overnight to 1.2525 on the back of comments made by the UK Central Bank Governor Mark Carney. The Bank of England left rates and the APP unchanged by an unanimous decision, however Governor Carney seemed a little concerned about rising inflation, while upgraded its growth forecasts for the next three years. Only one major data release overnight UK construction PMI index which hit a five-month low in January of 52.2, though still indicating modest growth, it was the weakest recording since August. The GBP/USD pair is currently at 1.2533 which is 0.97 per cent down on the previous days close. We now expect support to hold on moves approaching 1.2470 while any upward push will likely meet resistance around 1.2600.
USD, EUR, JPY
The U.S Dollar continued its precipitous downward slide throughout trade on Thursday as markets reacted to the Fed Reserve and FOMC' latest policy announcement while unease surrounding President Trump' protectionist trade polices escalated. Investors were left wanting following the FOMC' press statement and rate decision as expectations a possible March rate hike were all but wiped from the table. CME' Fedwatch tool saw expectations for a rate adjustment slashed from twenty to fifteen percent as the board, despite spruiking a hawkish assessment of the wider economy, offered little to promote an imminent policy change. The USD fell through 113 JPY touching intraday lows at 112.08 while the 19 nation Euro touched intraday highs at 1.0826 before paring gains. The Euro moved through 1.08 for the first time since the November 8 election on Tuesday after Peter Navarro, Trade advisor to President Trump, said the unit was grossly undervalued. Breaking resistance at 1.0830 could signal a shift in wider sentiment and prompt moves toward 1.10 and 1.12. Attentions today turn to key U.S labour market data for direction into the weekly close.
New Zealand Dollar
NZD / USD
0.7240 – 0.7340
The New Zealand Dollar gained nearly a full cent in yesterday' local session opening at 0.7240 post the FOMC announcement in early trading. Offshore Unemployment claims in the United States did little in market movements with the Kiwi reaching an eventual high of 0.7338 before being sold off and reversing all gains as US dollar regained its momentum to sit at 0.7290 on open. Volatility is expected to calm down today with little local data on the horizon heading into this evenings US session.
0.7480 – 0.7690
The Australian Dollar see-sawed during yesterday' day of trade and once again came within an inch of 76c against the Greenback overnight posting a high of 0.7596 and a low of 0.7550. The AiG performance of manufacturing index fell in the month of January to 51.2 however, still above 50 and signalling an expansion. Meanwhile, offshore, the Federal Open Market Committee (FOMC) released their interest rate decision and as widely expected the Committee kept current interest rates on hold at 0.50% - 0.75%. The statement showed no major changes or surprises. Investors will now turn to today' domestic Trade Balance and Building Approvals due at 11:30 AEST
1.6575 – 1.6750
The Great British Pound was the pick of the majors overnight supported by a favourable PMI reading for the first month of the year. Manufacturing output grew at the fastest pace since May 2014 as new order intakes expanded. The Pound continued its march against the US Dollar as a leaked report to the media stated that if Britain does not secure a workable deal then both the UK and European Union will be mutually damaged. Grounding to a low in the Asian session of 1.2550,the Sterling managed to trade as high as 1.2675 in overnight trading ahead of this evenings Bank of England' monetary policy meeting. It is widely expected that interest rates remain on hold at record lows of 0.25% with the potential for an improvement in growth and inflation outlook for the year of 2017 and beyond.
Despite upbeat U.S economic releases the Greenback failed to hold on to gains made earlier in the session against the Euro seeing EUR/USD test levels of 1.8010 again. The ISM manufacturing data rose from 54.5 in December to 56.0 in January supporting optimism in the manufacturing sector. Also, ADP payroll non-farm employment data rose by 246,000 last month, smashing expectations of an increase of 165,000. The Greenback came under pressure as the FOMC kept rates on hold noting that “Measures of consumer and business sentiment have improved of late” along with “Job gains remain solid and the unemployment rates stayed near records lows”. In other news, Eurozone manufacturing PMI data hit a 69-month high at the start of 2017 marking improved business conditions.
0.7230 – 0.7330
The New Zealand dollar enjoyed mixed fortunes throughout trade on Wednesday closing marginally lower on the day having recouped early losses. Softer than anticipated labour market data saw the NZD succumb to selling pressures throughout the domestic session retracing recent gains beyond 0.73 and moving back through 0.7250 as stronger U.s jobs data and factory growth compounded losses. Touching intraday lows at 0.7243 the Kiwi found support and rallied after the FOMC and Fed Reserve elected to leave rates on hold while signalling a March rate hike is unlikely. Reversing much of the day' early losses the Kiwi met resistance on moves approaching 0.73 and currently buys 0.7278 U.S cents. Attentions now turn to U.S unemployment claims and Non-farm payroll numbers Friday for direction into the weekly close.
0.7480 - 0.7690
The Australian Dollar for the month of 2017 has rallied over 5% thanks mainly to a new President taking office in the United States which is weighing on risk sentiment. The Aussie remained within a 30 pip range intraday between 0.7543 and 0.7572, most of its move happened offshore with the Aussie edging higher once again with comments from the Trump administration. This time Donald' top trade advisor Peter Navarro had accused Germany of currency exploitation which German Chancellor Angela Merkel said the country had no influence over the euro exchange rate. The US Dollar came under selling pressure and moved 50 pips higher to touch 0.7603 before consolidating around current levels of 0.7586 at the time of writing. Attentions now turn to US macro releases with ADP Non-Farm payroll and FOMC minutes.
1.6500 - 1.6700
The Great British Pound enjoyed mixed fortunes through trade on Tuesday initially falling to a fresh low for the session of 1.2411, however on the back of US President Donald Trump and his top trade adviser making comments about other countries' devaluations of their currencies, the Pound surged in afternoon trade to 1.2593 against the Greenback, helping it record its best January in six years. On the domestic data Net Lending to Individuals for the month of December grew at the slowest pace in five months. Mortgage approvals also for the month of December was up by 68,000 in the month, but below the expected forecast of 69,000. Attentions now turn to today' Manufacturing PMI and should indicate a slowdown in Manufacturing activity. The GBP/USD pair is currently trading at 1.2578. We now expect support to hold on moves approaching 1.2460 while any upward push will likely meet resistance around 1.2580.
The Euro was higher against the Greenback touching a high of 1.0810 as a raft of data was released out of the Eurozone. January CPI spiked close to a four-year high of 1.8%, this level is close to the European Central Banks target of 2% and the data supports expectations of headline inflation to continue rising in the coming quarters. The unemployment rate for the zone also fell to 9.6% last month vs 9.7% in November and Q4 GDP came in line with expectations growing at 0.5% in the last 3 months. In other news, there was a batch of Japanese data releases which included the Bank of Japan policy rate remaining unchanged at 0.10% and the unemployment rate also unchanged at 3.1%. USD/JPY slightly lower at 112.85 at the time of writing.
0.7250 - 0.7380
The New Zealand dollar having maintained a relatively tight trading range throughout much of its domestic session enjoyed strong gains overnight following fresh commentary from U.S President Donald Trump. The NZD rallied through 0.73 touching intraday highs at 0.7349 after the Republican again commented on China' currency devaluation while Whitehouse adviser' suggester the Euro was also being unfairly undervalued. The comments forced a rapid USD sell off as market fears the Trump administration is bidding to talk down the dollar escalated. Holding onto gains above 0.73 the Kiwi buys 0.7336 U.S cents at time of writing as attentions now turn to the FOMC and Federal Reserve for commentary and an update on monetary policy expectations.
0.7480 - 0.7590
The Australian dollar maintained a relatively tight 40-point range through trade on Monday amid several holidays in Asia. Chinese markets will be closed for the week due to the New Year holiday. While the Aussie did little against the US dollar, it rose against the Euro (0.7061) and British pound (0.6051). Attentions today turn to today' private sector credit figures and NAB Business Confidence for the month of December. The AUD/USD pair is currently trading at 0.7552. We now expect support to hold on moves approaching 0.7490 while any upward push will likely meet resistance around 0.7610.
1.6425 - 1.6625
The Great British Pound edged lower through trade on Monday failing to take advantage of broader USD weakness. Moving below its 100 day moving average investors looked to square positions selling down recent gains and moves back toward 1.26. Cable fell through 1.25 to touch intraday lows at 1.2467 suggesting a turn in the recent upside support and perhaps an indication of wider weakness. A consolidated break below the 200 day moving average and 1.2465/70 could signal a deeper sell off is at hand. With attentions squarely focused on Brexit plans and U.S policy changes politics will again drive direction through trade on Tuesday.
The Greenbacks downward spiral resumed on Monday as investors continue to react to President Trump' aggressive protectionist policies. Falling against the Japanese Yen and Swiss Franc investors sold down USD holdings following the introduction of tough new immigration executive orders banning refugees from specific Muslim countries. The order highlights trumps push to control immigration and protect U.S interest. In his first week in office Trump has failed to deliver of Fiscal reform or stimulus heightening concerns the new President will be unable to deliver the level of growth promised throughout the election. Falling through 113.50 JPY attentions now turn to The Bank of Japan and FOMC for short term direction. While both central banks are expected to maintain their current policy platforms all eyes will be on the Fed and its accompanying policy statement for clues as to whether the board expects newly proffered policies will affect its path to tighter monetary conditions.
0.7230 - 0.7330
The New Zealand dollar extended its rally against the world' base currency moving through 0.7250 U.S cents as optimism grows about the outlook for the New Zealand domestic economy. The kiwi dollar has now traded above 72 US cents for a week and has been helped by expectations the Reserve Bank of New Zealand will begin raising interest rates this year. The NZD/USD pair is currently trading at 0.7285. Attentions now turn to today' Visitor Arrivals data for December and Wednesdays labour market data which may show the jobless rate held below 5 per cent.
0.7480 – 0.7630
The Australian dollar edged higher through trade on Friday finding support on moves toward 0.75 despite wider USD gains. Advancing two tenths of one percent to intraday highs at 0.7572 the AUD found support in softer than anticipated US GDP numbers. American Growth Domestic Product increased at an annual rate of 1.9 percent in the fourth quarter, its slowest pace of growth in 6 years. The dour print dampened some investor' expectations surrounding the pace and timing of future Federal Reserve rate hikes. The Aussie is holding onto recent gains without extending beyond 0.76. A move and consolidated close above 0.7630 could signal and extended run higher while a move back below 0.75 may prompt further selling. Attentions today turn to a relatively quiet economic docket with direction continually driven by reactions to President Trump' ever changing political landscape.
1.6420 - 1.6720
The Great British Pound closed the week lower when valued against its US counterpart. Having touched a weekly high of 1.2672 the pound ended the session down at 1.2539. On Friday, US President Trump held a press conference with British Prime Minister Theresa May. Donald Trump has told Theresa May that 'Brexit is going to be a wonderful thing for your country'. The UK macroeconomic calendar is empty today. Attentions now turn to domestic consumer confidence numbers on Tuesday and Thursdays Federal Reserve and FOMC policy meeting. The pair is currently trading at 1.2546. We now expect support to hold on moves approaching 1.2470 while any upward push will likely meet resistance around 1.2571.
US politics continued to dominate markets as investors remained cautious after Trump' first week in office. In total he signed eighteen executive orders with one focusing on the construction of the Mexican border wall last week proposing a 20% tax on imports from Mexico into the USA to assist in paying for the wall. The USD Index remained choppy with the Dollar being under heavy pressure since Trumps inauguration. On the data front, US economic growth slowed for the final quarter of 2016 with a downturn in exports temporarily depressed activity. US GDP grew at an annual pace rate of 1.9% vs 3.9% in the previous quarter. The contributing factor was a plunge in soybeans in Q4 having surged in Q3. The annual rate showed growth of 1.6%, which was the worst in five years. Having said this, President Donald Trump has set a goal of doubling growth to 4 percent in the coming years through an ambitious stimulus program featuring tax cuts, deregulation and higher infrastructure spending. EUR/USD seesawed touching a high of 1.0725 on the news, but failed to hold the gains and closed the week at 1.0691. The Dollar is back under the 115 handle against the Japanese Yen buying 114.64.
0.7080 - 0.7180
The New Zealand dollar crept higher through trade on Friday supported by uncertainty surrounding the state and path of U.S policy reform under President Donald Trump. The Kiwi moved back through 0.7150 to touch intraday highs at 0.7176 as Trump' inauguration address failed to proffer a clear outline and policy platform when delivering on campaign promises across tax reform, infrastructure rebuilds and fiscal stimulus. Investors’ concerns that the 45th President will fail to deliver on growth have seen the USD has suffered significant selling and as a higher yielding asset in an environment of low or negative interest rates the NZD has enjoyed strong gains advancing some 3 cents in the month since Christmas. Attentions now turn to the first 100 days of the new President' tenure in a bid to obtain concrete policy plans and not just “America first” rhetoric.
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