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BY BRETT OTTAWA

Aussie continues to strengthen against the Greenback


Australian Dollar

AUD / USD

Expected Range

0.7600 – 0.7760

Powering to a high to of 0.7712 when valued against its US Counterpart last week, demand for the Australian dollar was spurred in the wake of comments made by several of the world' most influential central bankers who signalled that the days of super accommodative monetary policy settings are coming to an end. Viewed by many as a co-ordinated strategy, additional spice has been added to tomorrows RBA meeting as investors wait to see whether there will be any change in rhetoric following the hawkish stance adopted in the UK, Europe and United States. With the focus clearly on domestic macro indicators early in the week the Australian dollar opens more than one US Cent above levels witnessed at the same time last week. This morning the AUD buys 76.79 US Cents.

Great British Pound

GBP / AUD

Expected Range

1.6850 – 1.7000

Majors

USD, EUR, JPY

Expected Range

N/A

Quite a busy week ahead on the International Calendar kicking off tonight with US ISM Manufacturing Index which is expected to be quite robust. US Independence Day holiday on Tuesday and the US Federal Reserve will release the minutes from its last interest rate announcement on Wednesday. Finally, on Friday all eyes will be on the all-important non-farm payrolls report. The forecast is for the US unemployment rate to remain unchanged at 4.3%. In the Eurozone on Monday will see the release of the Unemployment rate for the month of May with expectations unemployment will remain steady at 9.3%. The EUR/USD pair is currently trading at 1.1422. We now expect support to hold on moves approaching 1.1380 while any upward push will likely meet resistance around 1.1460. The British pound is also stronger against the Greenback trading at 1.3019, its highest level since mid-May.

New Zealand Dollar

NZD / USD

Expected Range

0.7280 – 0.7380

The New Zealand Dollar continued its upward trend to end the week hitting a seven-month high of 0.7342. Opening Friday morning at 0.7296, The Kiwi was driven by a strong NZD building consent reading for the month along with bullish Chinese manufacturing data, bolstering risk on movements. NZD/USD cross this week looks to break through key resistance levels around 0.7340-0.7350 and continue its advance. Movements will be dependent on NZIER Business Confidence due to be released on Tuesday and the latest GlobalDairyTrade Auction on Wednesday. The New Zealand Dollar opens at 0.7335 against the US Dollar this morning.

BY JOEL HOLMES

Markets Driven by Central Bank Heads


Australian Dollar

AUD / USD

Expected Range

0.7575– 0.7700

Global optimism has again been spurred overnight following a raft of confidence boosting comments from a handful of the world' largest central banks. Driving the Australian dollar to its highest level since March when valued against its US Counterpart, its strength has since been well maintained as it currently oscillates around the 76.30 US cents mark. Whilst the domestic session today isn’t likely to offer many surprises, underlying shifts in the worlds reserve currency remain front and centre as investors await the release of this evenings US GDP print to see if realised economic growth sits alongside the optimistic projections being touted by policy makers.

Great British Pound

GBP / AUD

Expected Range

1.6800– 1.7000

Majors

USD, EUR, JPY

Expected Range

N/A

In a week with little heavy hitting economic releases the major currencies were driven by the Central Banks. Led by central bankers in the EU, UK and Canada, the hawkish tone across these regions signals the potential wind back of accommodative monetary support. Proving to be a catalyst in overnight markets, momentum really kicked off during the European trading session with ECB president Draghi delivering a speech with a mostly positive tone sending the Euro to a fresh 2017 high against the Greenback. Opening this morning at 1.1376, the markets continue to be bullish on the Euro despite the ECB suggesting markets misjudged Draghi' speech. Across the channel, the Bank of England' Governor Carney released a speech which markets have interpreted as primarily hawkish, back flipping on last weeks’ missive and sending the GBP higher. The positive comments coming from Europe led to the American dollar and Japanese Yen being the worst performers during the overnight session. The US Dollar Index (DXY), a measure of the dollar against a basket of currencies fell 0.39% and closed at 96.021. In JPY news, the USD/JPY currently trades at 112.28, having oscillated between a daily high of 112.34 and a low of 112.24. Markets now turn to economic data releases in the US to close out the week with GDP and Unemployment Claims being released during the American session tonight.

New Zealand Dollar

NZD / USD

Expected Range

0.7250 – 0.7350

The New Zealand Dollar is slightly higher than the Greenback up 0.4% on the day, having posted a daily high at 0.7313 and low at 0.7253. The Kiwi dollar has been on a bullish run since the middle of May despite the resurgence of the greenback. On the domestic front, investors will be watching for ANZ Bank New Zealand's business confidence survey today and building consents data tomorrow. The NZD/USD pair is currently trading at 0.7306. We now expect any upward push will likely meet resistance around 0.7320. The Kiwi is also weaker against both the Aussie 0.9591 (1.0426) and the British Pound 0.5649 (1.7700).

BY JOEL HOLMES

Euro rallies - Hawkish comments from Mario Draghi


Australian Dollar

AUD / USD

Expected Range

0.7500– 0.7630

The Australian dollar saw decent moves in markets overnight to test weekly highs once again. Opening yesterday at 0.7580, we saw upside resistance levels tested at the psychological barrier of 0.76, taking leads from positive sentiment tones in mid-morning trading. AUD/USD posted daily highs during the European session, but failed to move through the key upper barrier at present of 0.7630. All gains on the Aussie were quickly erased during North American hours as confident leads from United States consumer confidence and hawkish comments from FOMC members saw the US Dollar stronger. The Australian dollar open this morning square at 0.7585.

Great British Pound

GBP / AUD

Expected Range

1.6700– 1.7000

Majors

USD, EUR, JPY

Expected Range

N/A

Major currencies were dominated by comments by a number of Central Bank officials overnight. In what started as a fairly quiet day during the Asian session, currency markets whipped into gear during the European session overnight. The US Dollar Index (DXY), a measure of the dollar against a basket of currencies fell 1%. The majority of this movement was caused by the EUR/USD cross which saw a nine-month high after surprising comments from ECB President Mario Draghi. Draghi was optimistic in his speech, looking to gradually adjust its current monetary stimulus and change its stance to a more neutral tone. The Euro continued to rally into the North American session from its intraday lows of 1.1180 to an eventual high of 1.1350. United States CB Consumer Confidence sparked the USD/JPY to rally higher after a moderate rise for the month of June. Hawkish comments from FOMC member Patrick Harper continued this rally from 111.50 to a high of 1.1245 overnight. Despite a dip inflation, Harper is keen to see continued interest rate hikes as per current schedule.

New Zealand Dollar

NZD / USD

Expected Range

0.7200 – 0.7350

The New Zealand Dollar dropped overnight against the Greenback, falling below the 0.7300 mark, to a24-hour low of 0.7259. The NZD/USD pair having now peaked at 0.7343. Against the Euro the Kiwi dropped to a two-week low of 0.6410 after European Central Bank president Mario Draghi talked up the prospects for Europe's economic recovery. On the local data front, there are no macroeconomic data releases scheduled for today. The Kiwi is also weaker against both the Aussie 0.9580 (1.0438) and the British Pound 0.5670 (1.7635).

BY Joel Holmes

Dollar rises ahead of Yellen’s Speech in London


Australian Dollar

AUD / USD

Expected Range

0.7500– 0.7630

In what was largely a lacklustre session free from headline data sets the Australian dollar edged marginally higher throughout trade on Monday. Having opened at 0.7566 the AUD crawled to intraday highs at 0.7599, buoyed by a marginal uptick in oil prices. Having touched 7 month lows mid last week oil marked a 3rd consecutive daily advance and offered support across wider commodities while additional upward furtherance came in softer than anticipated U.S Durable Goods Orders. The continued string of weaker U.S macroeconomic data is serving to prop up the Aussie dollar and stave off any backward correction and attentions now turn to commentary from Fed Chair Janet Yellen and consumer confidence data for direction through Tuesday ahead of all important U.S GDP data and Inflationary indicators Thursday and Friday. Watch resistance at 0.7630 with supports at 0.7550 and 0.7520.

Great British Pound

GBP / AUD

Expected Range

1.6600– 1.6800

Majors

USD, EUR, JPY

Expected Range

N/A

Movements were once again light on for major currencies overnight. Despite initial pressure on the US Dollar after a weaker durable goods order print in the United States, the U.S. Dollar index regained previous losses to close higher 0.18% to 97.42. The EUR/USD initially climbed to intraday highs from 1.1170 to 1.1220 post American data before all pairing gains to 1.1182. Remarks by ECB President Mario Draghi suggested there is no expectation of immediate need to scale back current monetary stimulus. USD/JPY hit one month highs to 111.85 before a plethora of key note speakers overnight including Fed Chair Janet Yellen who is set to speak in London regarding global economic issues.

New Zealand Dollar

NZD / USD

Expected Range

0.7200 – 0.7300

The New Zealand dollar maintained a relatively tight trading range throughout much of its domestic session yesterday. The Kiwi reached an overnight high of 0.7310 against the Greenback after figures showed US durable goods orders dropped 1.1 per cent in May. Looking ahead today and all eyes will be on the Trade Balance release for the month of May with expectations to show a trade surplus of $420 million, slightly down from the previous month $578 million. The NZD/USD pair is currently trading at 0.7283. We now expect any upward push will likely meet resistance around 0.7320.

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