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AUD / USD
0.7600 – 0.7700
The Australian dollar hit a three week high last week, despite being hampered by strong resistance levels at 0.7720. Opening below the 0.77 handle on Friday, there was little movement in intraday trading before pulling lower as the United States CM Leading Index figures impressed and continue to show strength in the US economy. The Greenback strengthened against the Aussie seeing an eventual low in the American trading session closing at 0.7760. Locally we look to RBA Monetary Policy Minutes on Tuesday along with FOMC minutes in focus Thursday. With Presidents Holiday cutting the trading week short, we expect it to be a quiet day with the Australian dollar opening at 0.7675.
Great British Pound
GBP / AUD
1.6200 - 1.6375
The Great British Pound enjoyed mixed fortunes during trade on Friday rallying through 1.2550 before edging lower into the weekly close. Buoyed by stronger than expected Industrial production and Manufacturing output data Sterling touched intraday highs at 1.2571. The British economy has largely shrugged off suggestions it would stagnate in the wake of Britons move to extricate themselves from the wider European Union and currency flows have been largely dominated by Political expectations. General Brexit fears and a wider Greenback rally forced Cable lower as investors looked to President Trump and his promises for tax reform. Moving back through 1.2500 Sterling touched overnight lows at 1.2452 and opens this morning only marginally higher. Attentions now turn to Tuesday' all important yearly inflation print.
USD, EUR, JPY
The US Dollar remained broadly higher against the Euro as the pair slid to a two-week low of 1.0607 as growing concerns over the upcoming French presidential election continued to weigh on EUR/USD. Political risk is growing in the Euro region with a possibility of shock result in the election in the coming months. Meanwhile despite disappointing U.S data the US dollar index rose to 100.71 . The University of Michigan index of consumer sentiment declined to 95.7 in the preliminary February estimate which was below expectations. Meanwhile, Import Prices rose 0.4% in January which was more than expected driven by higher petrol prices, export prices rose 0.1% in line with forecasts. The Greenback remained well supported finishing the week strong as Trump said on Thursday that he would be announcing a “phenomenal” tax plan without giving any specifics. Against the Yen, the dollar changes hands at 113.60, there were no major announcements on either countries policy after President Trump and Japanese Prime Minister Shinzo Abe met in the US last week.
New Zealand Dollar
NZD / USD
0.7140 - 0.7240
The New Zealand Dollar closed the week lower when valued against its US counterpart as investors responded to the Federal Open Market Committee meeting and an upbeat retail sales and inflation prints. Local data on Friday saw Business NZ Manufacturing Index was down on the previous month from 54.2 to 51.6, and Core Retail Sales volumes rose 0.8 percent for the Q4 2016. This week attentions turn today' release of Producer Price Index (PPI) for the fourth quarter in what is otherwise a relatively quiet day for economics. The NZD/USD pair is currently trading at 0.7180. We now expect support to hold on moves approaching 0.7139 while any upward push will likely meet resistance around 0.7249.
1.6150 - 1.6250
It was a disappointing day for the British Pound as retail sales figures in the UK came in well under expectations -0.3% for the month. Attempting to keep its head above 1.2500 against its American counterpart last week, the Sterling saw immediate selling pressure and continues to trend lower to test support at 1.2400 on Fridays close. Investors look forward to a raft of British data this week as the Right move HPI kicks off proceedings along with Industrial orders. Both the Australian Dollar (1.6147) and New Zealand Dollar (1.7230) opening notably higher against the Sterling this morning.
The U.S Dollar moved higher against a majority of counterparts throughout trade on Friday as investors responded to an upbeat Federal Reserve and stronger than anticipated retail sales and inflation prints. Fed Chair Janet Yellen remained relatively hawkish when addressing a senate committee on Monetary Policy suggesting the FOMC would be prepared to raise rates three times throughout 2017 if the economy remains on track. Her comments were backed by both Boston and Philadelphia FOMC representatives and while offering some guidance did little to assuage the confusion stalking dollar bulls. The Greenback advanced against the Euro while the Yen rallied across the board. Uncertainty surrounding upcoming elections in France and the Netherlands and ambiguity encircling U.S fiscal and domestic growth policy has pushed investors toward safe haven plays bolstering demand for the Yen and Swiss Franc. The Yen advanced 0.3% against the world' base unit and moved back through 113.00 to touch intraday lows at 112.75. Attentions now turn Wednesday' FOMC meeting minutes with whipsaw action expected through early trade as investors responded to continued political developments across Europe and U.S markets enjoy an extended weekend in observance of Presidents Day.
0.7630 – 0.7730
The Australian dollar' upward trajectory continued throughout Thursday' domestic session advancing through 0.77 U.S cents. Lingering U.S profit taking mixed with upbeat labour market data helped bolster demand for the higher yielding unit and the AUD touched three month highs. A decline in the unemployment rate and larger than expected introduction of new roles to the economy dampened calls for RBA monetary policy intervention and bolstered demand for the Aussie driving the commodity driven currency toward an intraday high at 0.7729. Investors then looked to sell into the rally as the Aussie approached the next point of key resistance at 0.7735/40 and the unit slipped back below the 0.77 handle. Opening this morning buying 0.7694 U.S Cents attentions turn to next week' RBA minutes as a marker for further direction.
1.6300 – 1.6500
The Great British Pound is weaker today when valued against its US counterpart falling overnight to a low of 1.2491 on the back of comments by US President Donald Trump regarding his tax plans. Donald Trump has promised of a "phenomenal" announcement on tax to support growth and investment in the United States. The GBP/USD pair is currently at 1.2498 which is now 0.37 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 1.2585. On the data front today all eyes will be on the release of both manufacturing and industrial production figures for the month December.
President Donald Trump kept media outlets interested as usual and woke markets across the globe in what has been a quiet week for the US Dollar. In his meeting with Airline CEOs, Trump quoted “we are going to be announcing something over the next two or three weeks that will be phenomenal in terms of tax”. The USD then strengthened against the major currencies, DXY up 0.4% and saw the USD/JPY regain its uptrend from a low yesterday 111.75 to open this morning at 113.25. .S&P hit record highs and equities expect to open higher in the Asian session. EUR/USD reversed its recent uptrend hitting a peak overnight (1.0710), testing 1.0650 on open. The Euro could remain under pressure over the coming weeks in rising political uncertainty and a focus on fiscal policies across the Atlantic. Attention turns to China today with its release of trade balance figures along with this weekend' important summit between Japanese Prime Abe and President Trump where trade agreements is expected to take focus.
0.7150 – 0.7250
The New Zealand Dollar continued to lose ground against the U.S Dollar yesterday as the Reserve Bank of New Zealand squashed any expectations of a rate hike any time soon, with suggestions the RBNZ may only rise a quarter of a percent in the next 3 years. The NZD/USD pair dropped from 0.7275 to a low of 0.7196 before the European session kicked off and eventually touched a low of 0.7171 on the back of Trump comments. The new President said in a meeting with airline CEOs he would be announcing “something” over the new two to three weeks that would be “phenomenal” in terms of tax which saw a USD rally investors jumping back onto the Greenback.
1.6150 – 1.6300
The Great British Pound edged higher through trade on Thursday moving back through 1.25 to touch intraday highs at 1.2521. Sterling found support as investors sold down USD holdings, prompting the steepest single day decline of the past fortnight. Investors looked to readjust U.S monetary policy expectations fearing Fed Chair Janet Yellen failed to deliver, with conviction, a clear path to upward rate adjustments. As Cable looked to stretch its legs markets pared gains after stronger than expected U.S building and manufacturing data stemmed the flow and Sterling opens this morning at 1.2486.
The U.S Dollar enjoyed mixed fortunes through trade on Thursday advancing early before relinquishing gains into the daily close. Data out of the US was generally positive. Weekly unemployment claims for the week ending February 10 printed 239K, better than the forecast print of 245K. Housing starts for the month of December rose to 1.25M, while Building Permits reached 1.29M, both beating expectations and previously upwardly revised figures. The US Dollar closed the day lower against the EUR and the JPY. The EUR/USD pair is currently trading at 1.0673. We now expect support to hold on moves approaching 1.0620 while any upward push will likely meet resistance around 1.0710. USD/JPY pair is currently trading at 113.22 with an overnight high of 114.30. A quiet session ahead in the US with no data releases scheduled.
0.7160 – 0.7280
Reaching a high of 0.7242 when valued against its US Counterpart on Thursday the New Zealand dollar has done well to maintain its value up above the psychologically important threshold at the 72 US Cents mark over the past 48 hours. Whilst domestic flows yesterday were limited for the Kiwi the fundamentally positive tone of markets has remained comfortably in tact this week with a spread of data prints from the United States supporting the optimism. With a lower Greenback helping its cause the New Zealand dollar opens in a stronger position this morning as it currently buys 72.24 US Cents. Promising to be a busy Friday domestic retail sales figures scheduled out shortly remain the key highlight.
0.7650 – 0.7750
The Australian Dollar touched a low of 0.7635 overnight against the U.S Dollar on the back of stronger than expected US macroeconomic data. A raft of realises saw the Aussie retreat as US Retail Sales, Inflation data and Empire State Manufacturing beat expectations. As Fed Chair Janet Yellen began her second day testifying before the House of Financial Services Committee markets shifted focus and saw investors take profit driving the Aussie higher and breaking key psychological resistance levels of 77c and currently changing hands at 0.7717 at the time of writing. Local economic data today sees the Employment Change and Unemployment rate, economists expect around 10k jobs to have been added to the market with the Unemployment rate holding at 5.8%
1.6100 – 1.6300
The Great British Pound ended Wednesday marginally lower having recouped losses suffered throughout early European trade. A softer than anticipated expansion of wages and a flat unemployment print set Sterling on a downward trajectory breaking through 1.2450 before the selloff was compounded by upbeat U.S CPI and Retail Sales data that drove the Greenback toward 1 month highs. Touching intraday lows at 1.2390 the Pound then found support as investors looked to sell into the USD rally and took short term profits. Fed Chair Janet Yellen offered little additional insight into the timing of future rate hikes when she addressed the senate banking committee for a 2nd consecutive day, hinting rate hikes would be dependent on the impact of President trumps fiscal growth policies. Rallying back through 1.2450 to touch 1.2480 the Pound opens this morning at 1.2456 as attentions turn to Friday' Retail Sales report as the next macroeconomic marker for direction.
0.7150 – 0.7300
The New Zealand Dollar against its US counterpart moved pretty much in line with AUD/USD showing that both pairs took direction from offshore events. The NZD/USD initially dipped from 0.7195 to 0.7145 as the data sparked speculation that the Federal Reserve may increase interest rates as early as March. The Fed commented that they will “evaluate whether employment and inflation are continuing to evolve in line with these expectations” and that “further adjustment of the federal funds rate would likely be appropriate”. The commodity based currency rallied with profit takers jumping in driving the Kiwi to an overnight high of 0.7228 and currently trading at 0.7220 at the time of writing.
0.7620 - 0.7720
The Australian dollar opens this morning marginally lower having enjoyed mixed fortunes throughout trade on Tuesday. Moving higher throughout the domestic session the AUD rallied through 3 month highs after an NAB report showed business confidence grew at a faster rate than expected in January while Chinese inflation data surpassed expectations. Touching 0.7696 the Aussie then suffered heavy selling pressure relinquishing all daily gains and moving through 0.7650 to intraday lows at 0.7620. Comments from Janet Yellen drove the Greenback higher as the Fed Chair proffered an upbeat assessment of future rate hikes and lay the groundwork for three monetary policy adjustments throughout 2017. Having found support on an approach toward 0.76 the AUD recovered some of the evening' losses and opens this morning buying 0.7654 U.S cents. Attentions now turn to domestic Consumer Sentiment ahead of Key U.S inflation data and tomorrow' employment prints.
The Great British Pound suffered a sharp and sudden sell off Tuesday falling back through 1.25 U.S Cents and touching 2 week lows at 1.2449. A softer than expected year on year inflation print prompted investors to sell down Sterling on expectations the Bank Of England may looked to extend its stimulatory monetary policy platform. Softer price belies expectations the BoE may need to raise rates to combat escalating inflation as the weaker GBP forces imports higher and investors subsequently adjusted positions following the weaker than anticipated data release. Attentions now turn to unemployment data and wage growth as another key marker future inflation pressures.
The U.S Dollar enjoyed mixed fortunes through trade on Tuesday advancing early before relinquishing gains into the daily close. US Federal Reserve chair Janet Yellen gave a fairly upbeat testimony to the Senate Banking Committee. As long as the US economy continues to show signs of strengthening the Federal Reserve will look to continue to hike interest rates. The market now pricing in a forty-five percent chance of an interest rate hike next month. On the back of this hawkish tone the US Dollar advanced to a three-week high against a group of key currency counterparts. A busy calendar ahead tonight in the US with the release of CPI, Retail Sales, Industrial Production for the month of January. The EUR/USD pair is currently trading at 1.0576. We now expect support to hold on moves approaching 1.0520 while any upward push will likely meet resistance around 1.0625.
0.7125 - 0.7240
The New Zealand dollar traded in a narrow range in the local trading session yesterday (0.7170 – 0.7200) against its US counterpart as an increase in January food prices 0.9% saw little movement in currency markets. With the food price index having a 19% weighting on the CPI index, it is expected this could now cement an acceleration in annual figures above the current 1.2% reading in Q4 2016. Janet Yellen' semi-annual testimony overnight saw the Kiwi drop immediately fifty basis points to a low of 0.7135 with a March Fed Reserve interest rate hike still on the table. Across the Tasman, the Australian dollar fared better with a jump in NAB business confidence pushing the Kiwi lower from 94.00 Australian cents yesterday morning to 93.60 Australian cents on open. The Kiwi has recovered slightly to 0.7165 this morning against the greenback and the market looks to overnight readings of US CPI and retail sales.
0.7580 - 0.7680
The Australian Dollar retreated yesterday as the U.S dollar continued to benefit from US President Donald Trump and his remarks on tax reforms. The AUD/USD pair moved from 0.7684 to 0.7630 and opens this morning at 0.7645 as investors are expecting Trump will implement cuts for businesses and individuals. Markets have calmed and seem to be more at ease with Trump and what his administration will deliver which is benefiting the Greenback. Domestically NAB business confidence is due to be released today and with a strong rebound in December, the survey will be looked for clues on if this has been maintained.
1.6250 - 1.6450
The Great British Pound edged marginally higher through trade on Monday pushing through and holding onto gains above 1.25. Continued support following last week' stronger than expected Manufacturing and Trade data saw investors ride the cable rally while the Sterling/Euro cross touched two week highs. With near term support for the pound gathering momentum markets will be closely attuned to any indicators suggesting the economy is beginning to weaken following last June' Brexit vote. The British economy has been surprisingly resolute in the face of an expected reduction and retraction of economic activity capping losses and fuelling short term relief rallies. Attentions today turn to yearly CPI numbers as key indicator in determining support and resistance. A break above 1.2575/80 could signal a stronger advance toward 1.3640 and 1.27.
The U.S dollar edged higher through trade on Monday advancing against a group of key currency counterparts on renewed hopes tax reform will drive domestic growth prospects. As uncertainty surrounding the Trump administrations protectionist trade policies, aggressive immigration stance and nationalist diplomatic approach escalate the U.S dollar has suffered heavy selling pressure. However promises of wide reaching tax reform across both businesses and individuals are seen as a beacon of hope for markets and a signal Trump is moving toward growth focused policies. Advancing through 114 JPY the USD touched intraday highs at 114.15 before moving marginally lower while the Euro plunged half a cent moving back through 1.06 to touch intraday lows at 1.0593. Attentions today remain with political reforms while production price inflation and commentary from Fed Chair Janet Yellen drive macroeconomic direction into Wednesday' all important CPI prints.
The New Zealand dollar continued its downward trend after last week' RBNZ decision to keep interest rates on hold. Despite trying to push through the 0.72 handle late in local trading, it was bullish buying on US Dollars hitting three week highs, pushing the Kiwi lower, finding eventual support at 0.7160 in early morning trading. A lack of movement and data early on this week could soon be forgotten as a number of key releases offshore are likely to dominant headlines. Locally we look to the Food Price index which forms a major part of inflationary data. Decembers reading (-0.8%) was disappointing with a bounce potential for January. We eagerly await Chinese inflationary figures released in the Asian session today along with the Fed Chair Janet Yellen meeting the new congress, giving her semi-annual testimony early tomorrow morning. The Kiwi opens at 0.7175 this morning against the greenback and is steady against the Aussie 0.9380.
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