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AUD / USD
Holding near a two-year high, additional gains proved hard to come by for the Australian dollar on Monday with the domestic unit instead being supported by a Greenback which has continued to show very few signs of life. In a theme which is likely to continue ahead of Wednesday night' Federal Reserve meeting, market participants have been wary of pushing the AUD towards the 80 US Cents mark in the aftermath of the RBA' attempts to cool speculation that interest rates are heading higher. Having reached an overnight peak of 0.7967 when valued against its US Counterpart the Australian dollar opens marginally stronger this morning at a rate of 0.7922.
Great British Pound
GBP / AUD
USD, EUR, JPY
The Greenback advanced over its major counterparts yesterday finding support on the back of better than expected PMI numbers. US manufacturing and services sectors expanded at their fastest pace in four months, the index was up 54.2 from the previous month of 53.9, resulting in a six-month high. On a sour note existing home sales data slipped for the month of June, retreating by 1.8% to 5.52 million amid low supply. Looking ahead today all eyes will be on Japanese Monetary Policy Meeting Minutes at 9.50am AEST. The JPY/USD pair is currently trading at 111.15. We now expect support to hold on moves approaching 110.80 while any upward push will likely meet resistance around 111.50.
New Zealand Dollar
NZD / USD
0.7350 – 0.7500
The New Zealand Dollar struggled to mount any significant directional momentum through trade on Monday bouncing off highs of 0.7456 and lows of 0.7418 against the Greenback. The Kiwi has ended its four-day rally having broken above two majors levels last week, we see the next major area of resistance up around 0.7485 last seen on September 2016. With little of note on the docket today attention squarely remains focused on the US Federal Reserve monetary policy meeting which is scheduled to take place tomorrow.
0.7800 – 0.8000
The Australian dollar was hit hard late last week when valued against its US counterpart after the deputy governor of the Reserve Bank, Guy Debellle hosed down speculation that policy makers were signalling to push interest rates higher. Directing comments specifically at meeting minutes which were released a few days prior, Mr Debelle stressed that there was no new policy conclusions to be drawn and that monetary positions remain neutralised and overall balanced in the near-term. Despite falling to a session low of 0.7874 the Australian dollar still manages to open the new week above the 79 US cents mark, currently swapping hands at a rate of 0.7905. Mid-week, domestic CPI figures remain the highlight over the coming days as does the FOMC meeting which starts Wednesday evening.
1.6350 – 1.6500
The Greenback finished the week down almost 1 per cent against its major counterparts amid the resignation of White House Press Secretary Sean Spicer on Friday. The Euro gained 1.6 per cent on Thursday night following the ECB monetary policy meeting. President Draghi said that the ECB remains far from achieving its mandate to get inflation around its target of 2%. The EUR/USD pair settled at its highest level since August 2015 at 1.1674, up for a second consecutive week. This week all eyes will be on Wednesday' US Federal Reserve monetary policy meeting. The market is still expecting at least one more rate hike pending for this year. The EUR/USD pair is currently trading at 1.1673. We now expect support to hold on moves approaching 1.1620 while any upward push will likely meet resistance around 1.1715.
0.7400 – 0.7540
The New Zealand Dollar has once again found upside when valued against its U.S counterpart on Friday, the pair saw fresh 10-month highs late in the New York session and traded as high as 0.7459. Friday' local data releases did little to the Kiwi with total credit card spending in New Zealand increasing for the fourth straight month in June up 0.2% and Visitor Arrivals also reached another record month. The official figures showed a net migration of a record 72,300 in the year to June, 131,400 people arrived and 59,100 left. The economic data is very light this week with only Trade Balance due out on Wednesday. The NZD/USD pair could re-test 0.7485 a Sept 16th peak in the next few days.
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.
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.
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.
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