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BY MATT RICHARDSON

Market sees roadblock in way of Fed Rate hikes; USD moves lower


Australian Dollar

AUD / USD

Expected Range

0.7630 – 0.7730

The Australian Dollar drifted lower from Wednesdays open to an intraday low of 0.7667 as Wage growth continues to disappoint. Reserve Bank governor Philip Lowe suggested in his Australia -Canada Summit speech that he does not expect wage growth to continue lower. The seasonally adjusted reading of 0.5% for the December quarter was on par with market expectations. Construction work data also failed to disappoint, falling 0.2% for the last quarter 2016, but had little impact on the local currency. Spirits were restored shortly after as Chinese home prices continued to rise, boosting the Australian dollar, hitting eventual highs of 0.7697 to close the Asian session. The Federal Reserve minutes overnight failed to give any hints as to when the next interest rate increase might be with the rhetoric wording of “fairly soon” producing US dollar weakness. The Aussie continues to test major resistance at current levels and opens at 0.7710 ahead of the local Private Capital Expenditures data this morning.

Great British Pound

GBP / AUD

Expected Range

1.6050 – 1.6300

The Great British Pound weakened against the Greenback as UK fourth quarter GDP data was revised up by 0.1pp to 0.7% which further confirmed a more resilient economy following the EU referendum. The Office for National Statistics reported strong consumer spending and services output but was offset by a fall in fixed investment spending. Following the report, the Cable fell from 1.2470 to 1.2440 and touched an eventual low of 1.2410. With the economic calendar light for the reminder of the week the pair will look offshore for direction. GBP/AUD marginally lower at 1.6145 and GBP/NZD at 1.7309 at the time of writing.

Majors

USD, EUR, JPY

Expected Range

N/A

New Zealand Dollar

NZD / USD

Expected Range

0.7120 – 0.7240

Despite a strong U.S existing Home Sales print for January of 5.69 million which was well above expectations of 5.55 million the NZD/USD had little reaction to the data as it eagerly anticipated the release of the US Federal minutes. The minutes of the previous meeting showed that a strong currency could hurt the US economy and that officials said it may be appropriate to raise interest rates again ‘fairly soon’ should jobs and inflation data come in line with expectations. As soon as news hit the wires the pair moved from 0.7130 to 0.7190 and has consolidated at this level.

BY MATT RICHARDSON

Aussie range bound as heightened political uncertainty weigh on the Euro


Australian Dollar

AUD / USD

Expected Range

0.7600 - 0.7730

Once again it was a fairly lackluster day for the Australian dollar, slowly moving to an overnight low of 0.7650 before the USD was sold off across the board on a lower than expected Manufacturing PMI reading. Starting the day at 0.7685, the Aussie dropped twenty points on the release of the RBA monetary minutes highlighting disappointing GDP growth for the third quarter. They also noted the “deprecation of exchange rates since 2013 had assisted the economy in its transaction following the investment boom”. Investors looks to Governor Philip Lowe' speech this morning at this year' Australia-Canada Leadership Forum along with domestic wage price data where the annual growth rate has fallen every quarter bar one, since 2012. The Australian Dollar has squared overnight losses and opens at 0.7680.

Great British Pound

GBP / AUD

Expected Range

1.6150 - 1.6350

Following the Bank of England' February Inflation report the Great British Pound came under selling pressure moving from 1.2475 touching a low of 1.2400. The UK posted a surplus in 6 months however it fell short of expectations 9.8 billion vs 14.4 billion. Adding fuel to the fire was comments by MPC member Gertjan Vlieghe that economic forecasting can never be completely accurate and that they probably will not forecast the next financial crisis or next recession. Last year it had anticipated an economic slowdown after the Brexit vote but in fact the economy continued to grow and weathered Brexit quite well. In other news, UK Public Sector Net Borrowing showed a smaller-than-expected surplus in January of 9.4 billion Pounds, UK Chancellor MR Hammond intends to bring Britain' Budget down to 3.5% of GDP. Investors turn to UK' Second Estimate GDP data today.

Majors

USD, EUR, JPY

Expected Range

N/A

The Dollar rallied through trade on Tuesday as U.S markets reopened after a long weekend and the Euro suffered heavy selling on heightened political risk. Commentary from Cleveland and Philadelphia Fed officials’ bolstered demand for the world' base currency as the regional presidents echoed Janet Yellen' rhetoric of last week, hinting 3 rate hikes throughout the course of the year would still be appropriate. CME' Fed Watch Tool tracked an increase in those expecting multiple rate hikes while a March policy amendment gained greater momentum advancing some five percent. The Greenback edged back toward 114 JPY breaking through 113.50 while the Euro suffered one its steepest daily depreciations in more than a month. Tumbling through 1.06 and 1.0550 the Euro touched intraday lows at 1.0527 as anti-European Union rhetoric intensifies. As nationalist candidates Marine Le Pen and Gert Wilders gather support in France and the Netherlands there are increasing concerns a shock victory in either country could signal a further European breakup. As attentions remain squarely focused on evolving electoral polls the FOMC/Fed meeting minutes and will provide focussed direction throughout trade on Wednesday.

New Zealand Dollar

NZD / USD

Expected Range

0.7080 - 0.7240

The New Zealand dollar moved marginally lower through trade on Tuesday touching intraday lows at 0.7130. The Kiwi came under selling pressure following a softer than anticipated Global Dairy Trade Auction in which prices for whole milk powder fell 3.7%. The poor print comes after marked declines in early January and December forcing prices toward March 2015 highs. A break below this level may erode confidence in the recovery and spark a deeper price drop. With Fed officials spruiking a hawkish tone attentions now turn to the FOMC meeting minutes for direction through trade on Wednesday.

BY MATT RICHARDSON

Volumes light ahead of RBA Rhetoric


Australian Dollar

AUD / USD

Expected Range

0.7600 – 0.7700

The Australian dollar traded in a tight 25 pip range for a conservative start to the week as the annual Presidents Day holiday produced low liquidity in the markets. Opening Monday morning at 0.7765, The Australian dollar topped out at 0.7690 and could potentially test the 0.77 handle once again this week. With domestic data light on, the spotlight turns to central banks as investors look for any change in monetary stance by the RBA in today' policy minutes release along with the FOMC on Thursday. The Australian dollar opens this morning at 0.7685 against its US counterpart.

Great British Pound

GBP / AUD

Expected Range

1.6150 – 1.6350

The Great British Pound advanced against its US Counterpart reaching an overnight high of 1.2483 during the London morning, before settling around 1.2460 in late afternoon trade. However, amid a holiday in the US market volatility remains lows. There were some minor macroeconomic releases in the UK overnight starting with the release of Rightmove House Price Index which was up 2 percent for the month of January. CBI Industrial Order survey was also better than expected up to 8 from previous 5. While another quiet day is expected, ahead attentions will turn to today' Inflation Report Hearing and Public Sector Net Borrowing.

Majors

USD, EUR, JPY

Expected Range

N/A

Markets offered little to excite movement through trade on Monday as U.S investors enjoyed an extended weekend in observance of Presidents Day, ensuring volumes remained thin and price action muted through much of session. The Euro edged marginally higher as the 19 nation combined unit shrugged off advances by far right presidential candidate Marine Le Pen holding onto gains above 1.06. While the cloud of political uncertainty weighs heavy on the Euro the impact in financial markets seems focussed on bonds rather than currencies at this point. Markets are still pricing in a win for Centrist favourite Emmanuel Macron ensuring reasonable support to the downside for the Euro. With U.S markets re-opening today attentions turn to Key Manufacturing and Services data as drivers of Macro movements while political uncertainties shape wider direction. <br> <br>

New Zealand Dollar

NZD / USD

Expected Range

0.7140 – 0.7240

On the back of a US holiday the New Zealand dollar opens this morning little changed when valued against its US Counterpart. Local domestic economic factors continue to be positive for the Kiwi dollar with yesterday' Producer Price Index (PPI) for the fourth quarter rose more than expected. For the three months ending in December Input prices rose 1 percent, while output prices rose 1.5 per cent which pointed to inflationary pressures. Attentions now turn to tonight's Global Dairy Trade auctions. The NZD/USD pair is currently trading at 0.7187. We now expect support to hold on moves approaching 0.7138 while any upward push will likely meet resistance around 0.7239.

BY MATT RICHARDSON

Yen Rallies in Safe Haven Push


Australian Dollar

AUD / USD

Expected Range

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

Expected Range

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.

Majors

USD, EUR, JPY

Expected Range

N/A

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 &ldquo;phenomenal&rdquo; 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

Expected Range

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.

BY MATT RICHARDSON

Yen Rallies in Safe Haven Push


Australian Dollar

AUD / USD

Expected Range

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

Expected Range

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.

Majors

USD, EUR, JPY

Expected Range

N/A

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.

New Zealand Dollar

NZD / USD

Expected Range

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.

BY BRETT OTTAWA

Strong US Economic data continues


Australian Dollar

AUD / USD

Expected Range

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.

Great British Pound

GBP / AUD

Expected Range

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.

Majors

USD, EUR, JPY

Expected Range

N/A

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 &ldquo;we are going to be announcing something over the next two or three weeks that will be phenomenal in terms of tax&rdquo;. 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&amp;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.

New Zealand Dollar

NZD / USD

Expected Range

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 &ldquo;something&rdquo; over the new two to three weeks that would be &ldquo;phenomenal&rdquo; in terms of tax which saw a USD rally investors jumping back onto the Greenback.

BY BRETT OTTAWA

Strong US Economic data continues


Australian Dollar

AUD / USD

Expected Range

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.

Great British Pound

GBP / AUD

Expected Range

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.

Majors

USD, EUR, JPY

Expected Range

N/A

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.

New Zealand Dollar

NZD / USD

Expected Range

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.

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