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AUD / USD
0.7910 – 0.8000
During a week of daily gains for the Australian dollar, yesterday' session proved no different with the domestic unit briefly capturing fresh highs when valued against its US Counterpart. In what' likely to frustrate policy makers who have repeatedly called out a stronger AUD as a major headwind towards a quicker transition away from a commodity, export-driven growth path, highs overnight of 0.7987 see' the currency holding levels above valuations not seen in more than two years. Whilst data flows remain light today, the 80 US cents barrier remarkably only now sits a stone' throw away as the Australian dollar currently buys 79.57 US Cents.
Great British Pound
GBP / AUD
USD, EUR, JPY
Dominating flows in overnight trade was Central Bank activity as both the ECB and BOJ maintained the status-quo with reference to existing interest rate settings. Whilst the JPY remained relatively steady versus the Greenback, opening at 111.816 this morning, the same cannot be said for the Euro which initially whipsawed, later advancing against the worlds reserve unit. Reaching an eventual high of 1.1656, gains have since been solidified for the shared currency after Mario Draghi signalled that the ECB would review bond purchases in the autumn as policy makers initiate the tricky process of unwinding QE, in essence normalising monetary settings. Opening at levels not seen in more than a year the Bloomberg Dollar Spot Index fell a further 0.3 percent.
New Zealand Dollar
NZD / USD
0.7340 – 0.7450
The Kiwi advanced again overnight to reach a high of 0.7414, a gain of 62 points from Monday' open. Opening this morning at 0.74, the market oscillated between 0.7333 and 0.7414 to ultimately post an increase of 81 points, amidst the broader context of continued USD weakness. Across the Tasman, the Kiwi regained some of its losses to open this morning at 0.93. Initially the cross was driven down by Australian labour data but worked its way back up as Iron Ore prices dipped. With a quiet end to the week on the domestic economic calendar in store for the Kiwi, the New Zealand Dollar looks to tread water ahead of the European and American trading sessions.
The Australian dollar has comfortably maintained its solid footing over the course of the past 24 hours, hitting a high of 0.7954 when valued against its US Counterpart. With the Greenback remaining well and truly sidelined, the Australian dollar when measured against a basket of other currencies has now appreciated by a staggering 6.5 percent since the start of June, a push higher mainly driven by a soft US Dollar as well some aggressive comments with reference to future monetary policy settings from the RBA. In what could prove to be another important leaver for the AUD today, investors will be eyeing a job' report for the month of June. Opening stronger the AUD currently buys 79.54 US Cents.
In a busy session for global markets, US Stocks surged on strong earnings, treasuries finished marginally higher whilst oil advanced. Steading itself when valued against a handful of its major peers, the US dollar has been well supported over the past 24 hours following the release of some strong building permit and housing start figures. During a day of reversing trends the Euro has come off its highest closing mark since August 2015 as investors remain wary of the ECB' meeting which is scheduled to commence in Frankfurt this evening. Concerned by shift away from Mario Draghi' previously hawkish stance the shared currency opens weaker this morning at a rate of 1.1521.
0.7310 – 0.7420
The Kiwi has maintained its gains from yesterday, oscillating between 0.7340 and 0.7387 in overnight trading despite softer CPI numbers. Strengthened by a general decline in the USD yesterday, the Kiwi opens this morning at 0.7356. With little on the domestic economic calendar front the Kiwi is trading within a tight range ahead of policy statements from the European Central Bank and the Bank of Japan. Closer to home, the NZD fell to a two-month low against a bullish Australian dollar to currently trade at 0.9250. Strengthened by a more upbeat RBA and an uptick in commodity prices, the Aussie will be tested with labour market figures due today.
Whilst the worlds reserve currency continued to drown yesterday the Australia dollar took flight, racing to levels not seen since May 2015. Suggesting that the Reserve Bank of Australia possess a more hawkish view of the economy than many had expected; minutes from the Central Bank' last meeting showed that it expected growth to have picked up notably during the second quarter. Presenting the largest shock, comments that neutral interest rate settings represent levels closer to a cash-rate of 3.5 percent, the Australian dollars reaction was swift, rocketing to a high of 0.7942 versus its US Counterpart. Opening 1.5 percent higher this morning at a rate of 0.7915, volatility levels are likely to remain elevated today ahead of domestic labour market numbers.
Large movements by the Australian Dollar dominated headlines yesterday as the US Dollar continues its drive lower. Both equity markets and commodity prices finished flat for the day as the US Dollar Index (DXY) fell 0.6%, a 10-month low. News of the United States healthcare bill being rejected in the senate did further harm for the greenback as markets question President Trumps ability to close deals. The bears came out to play as USD/JPY slid from its retest of the 113.00 handle to just hang on above 112.00 in the close of the North American session. The Euro was the biggest winner, seeing a 1% gain for the day, at one point rising from 1.1470 to an intraday high of 1.1585 before settling slightly lower this morning to open at 1.1555. After a day of large swings, we expect a calmer day with little macroeconomic data released around the globe today.
0.7300 – 0.7400
The New Zealand dollar traded in a wide range against the US dollar overnight amongst some heavy currency swings across the globe. Earlier in the session, NZ' Q2 Inflation numbers came in under expectation pushing the Kiwi 60 pips lower to around 0.7265. Following the collapse of the US healthcare bill however, the Kiwi soared to 0.7353 to open this morning at 0.7342. Despite the softer CPI numbers in NZ, the Kiwi traded within a tight range against the other majors. Against the Sterling, the Kiwi extended slightly to open at 0.563 while conversely falling 0.2% against the Euro to open at 0.6355. Across the Tasman however, the hawkish comments from the RBA minutes has sent the Aussie flying across the board and driven the Kiwi cross rate down by about 1% to open at 0.9276. With a quiet day on the domestic front, all eyes now turn to Australian unemployment numbers and Japanese monetary statements for direction.
Supported early, the Australian dollar reached its highest level in two years when valued against its US Counterpart yesterday after economic prints from China topped forecast. Whilst base metals also enjoyed a strong session, highs of 0.7834 proved to be relatively short-lived for the AUD on Monday as investors remained mindful of the fact the domestic unit has captured gains in excess of 8 percent since the beginning of this year. In looking to add further momentum, opportunities for additional topside arrives tomorrow ahead of a monthly labour market report. Opening marginally softer at a rate of 0.7798 attention today will be focused towards minutes from the Reserve Banks last meeting.
It was a relatively slow session to start the week as a public holiday was observed in Japan. Both equities and the US dollar index saw little movement also due to a light economic calendar in the United States. Chinese data was on the pace yesterday, supporting commodity currency risk on movements. GDP, industrial production and retail sales all fared better than expectations. Focus shifts to the Eurozone this week as the ECB meet for their monthly press conference. Traders will be keen to get any further hints of bond tapering by ECB President Mario Draghi as the EUR/USD nudged up towards 1.15. USD/JPY looks to push back up to the trend line between 112.80 and 113.50 ahead of Bank of Japans policy meeting on Thursday afternoon.
0.7250 – 0.7360
The New Zealand Dollar has opened weaker against the Greenback ahead of today's inflation data which is expected to come in weaker than the 0.3 per cent Reserve Bank forecast. Economists expect inflation to come in at 0.2 per cent in the three months ended June 30. Today we will also see the release of the Global Dairy Trade auction which will be closely monitored by traders. The NZD/USD pair is currently trading at 0.7327. We now expect support to hold on moves approaching 0.7259 while any upward push will likely meet resistance around 0.7347.
0.7750 – 0.7900
Breaking through the 78 US Cents mark for the first time since May 2015, the Australian dollar benefitted in a big way late last week from a notably softer Greenback. Driven higher initially by comments made by US Fed Chair Janet Yellen who surprised investors by noting that monetary policy settings are sitting a lot closer to neutral than many had expected, a raft of disappointing economic releases from the world' largest economy on Friday further increased the appeal of the AUD. Having touched an early session high of 0.7834 when valued against its US Counterpart, the AUD remains vulnerable to additional price-fluctuations today ahead of an all-important GDP and Industrial production print due out of China this morning.
Price action was predominately moved by the eagerly awaited release of United States core CPI inflation for the month of June. Annualised CPI growth declined to 1.6% from 1.9% in May, disappointing market expectations and dampens the potential for a third interest rate hike by the Fed this year. Retail sales were also lower as the US Dollar was sold off in droves against the majority of major currencies. Euro continued its run, seeing a 14-month high last week of 1.1480 after a greenback sell off ahead of their own set of core inflation figures this evening. USD/JPY slumped from 114.30 highs to the mid 112' on Friday evening, with a bank holiday in Japan expected to slow volatility. Data set from China today will be the main focus on investors’ minds.
The Kiwi advanced further against the Greenback after weak US data reduced the prospects of a rate hike. With US inflation data surprising the market on the downside, coupled with soft retail sales and consumer sentiment numbers the USD fell dramatically across the board. With the NZD reflecting the smallest gain at 0.4% the Kiwi now trades around 0.735 this morning. Trading at a near five month high, the Kiwi now turns to second quarter inflation figures tomorrow for direction.
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