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AUD / USD
0.7500 – 0.7650
Attracting substantial interest the Australian Dollar tracked notably higher intraday yesterday. Reaching an eventual one-month peak of 0.7566 when valued against its US Counterpart, demand was spurred by a GDP reading from the ABS which showed Australia' economy had grown by 0.3 percent over the first three months of this year. Whilst a marked slow-down from the 1.1 percent recorded during the final quarter of 2016, near-term fears that the Australian economy was tracking towards recessionary territory have been side-lined, at least for the time-being. Given the softness of the Greenback which has offered additional support, the Australian dollar has been on a tear over the past 24 hours, opening 0.5 % higher a rate of 0.7549.
Great British Pound
GBP / AUD
1.7100 - 1.7300
The Great British Pound rose to its highest level in two-weeks as the latest polls see the Conservative party leading the race against Labour in the upcoming British election. According to a YouGov poll the gap vs Labour is still very close and claims of a hung parliament is unsettling for the Sterling at the present time. The GBP/USD also referred to as the ‘Cable’ moved from levels of 1.2887 through 1.29 to touch an eventual high of 1.2966. Today' vote marks a historical event as not only will it determine who will lead the UK through the next five years but also who will oversee the Brexit. With the approach of key risk events in the UK and the US with Former FBI Director Comey set to testify before the senate, markets will be closely watching Thursdays events unfold.
USD, EUR, JPY
The US dollar has lost more than 1.5% against the Japanese Yen so far this week, weighed down by a sharp drop in US Treasury yields. The JPY/USD pair is currency trading at 109.36. We now expect support to hold on moves approaching 109.40 while any upward push will likely meet resistance around 110.20. On the data front, yesterday Japanese leading index declined to a five-month low in April according to preliminary estimates down to 104.5 from previous 105.7 in March. Looking ahead today all eyes will be on the Japanese final Q1 GDP figures, with expectations for a quarterly growth of 0.6% up from an initial estimate of 0.5%. The EUR/USD pair closed marginally lower 1.1256 while the GBP/USD pair rose to an overnight high of 1.2966.
New Zealand Dollar
NZD / USD
0.7150 - 0.7250
Overnight, the Kiwi has moved sideways against the greenback, unable to hold on above 0.72. Trading slightly lower today at 0.7194, the Kiwi has continued to bounce off resistance at 0.72 despite a general USD softening. Traders now turn to Former Director Comey' first senate testimony for a potential catalyst in the NZD/USD. Meanwhile, the Kiwi rose to a 6 week high against the euro ahead of a pivotal ECB meeting which may mark the end of European Central Bank' accommodative monetary policy stance. Currently trading at 0.6389, the NZD earlier touched as high as 0.6422. Across the Tasman, the NZD fell after the Australian GDP release and has since been range bound between 0.9510-0.9540. With Australian and Chinese Trade Balance numbers released today, further direction could be derived for the NZD/AUD cross rate.
0.7450 – 0.7600
There has been an overall subdued reaction to The Reserve Bank of Australia' decision to keep the cash rate at a record low of 1.5 percent for a 10 consecutive month. In an announcement unanimously predicted by economists, RBA Governor Philip Lowe in his statement highlighted that sluggish real wages growth was constraining household consumption. Whilst the performance of the Australian dollar over the past 24 hours has been robust, its main form of support has come off the back of a Greenback which has slumped to an 8-month low. Ahead of today' important GDP print which is expected to reveal a mediocre growth trajectory of just 0.3 percent, the Australian dollar opens in a stronger position as it currently buys 75.08 US Cents.
The Great British Pound was the exception in movements overnight against the US dollar as investors position themselves ahead of the UK election. While most currencies took advantage of a weaker US dollar, the Sterling moved lower from its intraday high of 1.2950 in choppy trade as opinion polls are released over the coming days. With little macroeconomic data to focus on the cable cross moved to an overnight low of 1.2875 as the YouGov poll currently show a tightening in the Conservative parties lead to 4 points ahead of Labour. GBP/USD paired losses in the North American session to test the 1.29 handle on open. The Sterling is also lower against the Australian dollar - 1.7175 and the New Zealand Dollar - 1.7950.
The U.S Dollar enjoyed mixed fortunes through trade on Tuesday advancing early before relinquishing gains into the daily close. The US Dollar is lower this morning after a rally in US Treasuries. On the US data front, overnight the US JOLTS Jobs opening were 6.04M against 5.79M previous. The EUR/USD pair traded within a tight 40 pips range yesterday reaching a session high of 1.1284. Eurozone Retail Sales figures for the month of April rose by 0.1% when compared to March, and by 2.5% when compared to a year earlier. Looking ahead today a pretty quiet session expected with the only scheduled release of German Factory Orders and Italian Retail Sales for the month of May. The JPY/USD pair is currency trading at 109.36 tumbling below 110. The greenback saw losses against all of the major currencies but USD/JPY took the brunt of the selling. We now expect support to hold on moves approaching 109.10 while any upward push will likely meet resistance around 109.80.
With Thursday bringing the UK Election, a potentially pivotal ECB meeting and former FBI Director Comey' testimony, off-shore markets are keen to reduce their positions. Traders have worked the USD lower in an attempt to offload risk before these three key events leading to a softening USD. Domestically, the Kiwi continues a strong recovery. Driven by buoyant domestic data and US policy concerns, the NZD rose to 72.05 before settling at 0.7188 this morning. Direction now turns to Thursday' three key events while keeping an eye across the Tasman for first quarter Gross Domestic Product.
0.7400 – 0.7550
Starting the new week in a buoyant mood the Australian dollar remained well supported when valued against its US Counterpart on Monday with the worlds reserve currency very much struggling in the context of a cautious global backdrop. Trading as high as 0.7498 yesterday, falling oil and US equity prices did the majority of the damage as the Aussie tracked incrementally higher during overnight trade. In what' shaping as a week littered with key risk events, policy makers are set to keep interest rates on hold when they meet today as broader measures of economic growth remain weak. Opening stronger this morning the Australian dollar currently buys 74.82 US Cents.
The Great British Pound has regained losses sustained under the 1.2900 handle as the market turns its attention to this week' UK snap election. Despite a disappointing UK Services PMI release for the month of May, Sterling was little moved early on in European trading. Sterling then advanced to a 10-day high of 1.2940 as opinion polls suggest a Conservative Party victory on Thursday evening. With regular opinion polls in the lead up to this week' snap elections, it is expected to be a volatile week for the Sterling as it drifted off to test the 1.2900 handle on open this morning. The Sterling opens lower against the Australian dollar 1.7230 and steady at 1.8080 against the New Zealand Dollar.
On the back of a public holiday in some European countries yesterday the US dollar traded within limited range all through Monday. The EUR/USD pair ended the day marginally lower trading at 1.1234, slightly weaker than last week' high of 1.1284. The EUR/USD pair is currently trading at 1.1258 and attentions now turn to next week' ECB monetary policy meeting. The British Pound broke through the 1.2900 level overnight reaching a high of 1.2940 before settling around 1.2906. There are no major data releases scheduled before the upcoming UK elections. In Japan, there were no data releases yesterday. Another quiet day ahead with again no data releases scheduled. The JPY/USD pair is currency trading at 110.46. We now expect support to hold on moves approaching 110.20 while any upward push will likely meet resistance around 110.85.
0.7100 - 0.7200
We’ve seen a fairly benign overnight session following the public holiday with most of the price action centred on softer employment data on Friday. Following the disappointing employment numbers in the US, The NZD broke through resistance at 0.71 to reach a 3 month high at 0.7149. Currently trading at 0.7134, the Kiwi looks to this weeks’ Global Dairy Trade Auction for domestic direction and this afternoons RBA statement for the Aussie cross rate.
0.7380 – 0.7480
The Australian dollar moved higher into the weekly close on Friday as investors took advantage of a softer than anticipate U.S jobs report and pushed the commodity driven unit back through 0.74 U.S. cents. Having touched intraday lows at 0.7374 the AUD rebounded bouncing to session highs at 0.7443 as grim U.S macroeconomic data forced investors to revisit their expectations for multiple rate hikes in half two of 2017. The Aussie has remained largely range bound through the last fortnight bouncing between support at 0.7380 and resistance on approach to 0.7480/0.75. Attentions this week turn to the RBA and tomorrow monetary policy statement. We anticipate the board to maintain its current neutral policy stance with rates to hold at 1.5%.
1.7150 - 1.7450
The Great British Pound offered little to excite investors through trade on Friday bouncing within a relatively tight 50 point range for much of the day. With little macroeconomic data on hand and a break in opinion polls investors seemed wary of extending positions ahead of the June 8 General Election. While the Conservatives are still pegged to retain government variances in polling suggest a swing in the majority which could have a wider impact on Brexit negotiations and medium term direction. Opening sharply lower following the horrific events at the weekend with London again besieged by terror attacks attentions turn Thursday' election for direction and guidance. We are watching resistance at 1.2960/1.30 and support at 1.2780 in the lead up.
The U.S Dollar touched a new low under the Trump Presidency after a softer than anticipated non-farm payroll print forced investors to recalibrate monetary policy expectations. The monthly Job' report showed fewer than expected new jobs added to the economy in May while average hourly earnings and wage growth were largely unchanged and data for March and April were revised lower. The slowdown suggests perhaps a shift in labour market momentum and while we still anticipate the Fed will raise rates later this month expectations for additional rate hikes later in the year are waning. The dollar slipped below 110.50 against the Japanese yen while the Euro edged nearer 1.13 touching intraday highs at 1.1280. Attentions now turn to revised labour costs and services data for direction through trade on Monday ahead of ECB rate announcement and commentary. A hawkish Draghi and ECB could prompt additional Euro gains as the market is currently leant toward a controlled and perhaps dovish statement continued accommodative monetary policy.
0.7080 - 0.7180
The New Zealand dollar' upward momentum continued through trade on Friday following weaker than expected U.S labour market data. The NZD surged through resistance at 0.71 to touch intraday day and two month highs at 0.7142 after May' non-farm payroll report showed a step decline in the number of new jobs added to the US economy. Further adding to the Greenbacks woes was a downward revision to March and April numbers suggesting labour market momentum is waning and that the recent slowdown may be more than just a seasonal correction. With resistance countering moves toward and through 0.7150 investors will be keenly attuned to macroeconomic data sets over the coming weeks as markers for a potential shift in Fed policy and the catalysts for additional Kiwi upside.
0.7300 – 0.7400
The Australian Dollar sell off continued through trade on Thursday as the commodity driven unit eased back below 0.74 U.S cents. Having touched intraday highs at 0.7453 following stronger than anticipated retail sales growth the Aussie plunged as iron ore prices moved lower and expectations for growth throughout the first 6 months of 2017 waned. Testing support the AUD dipped lower still, despite an uptick in oil prices, as a string of stronger than expected U.S macroeconomic data sets and an uptick in US equities helped fuel support for the USD. Preliminary non-farm payroll numbers and manufacturing improved throughout May forcing the Australian dollar to touch intraday lows at 0.7373. Attentions now turn to critical U.S wage growth and labour market data as directional markers into the weekly close.
1.7300 - 1.7600
The Great British Pound enjoyed a relatively quiet trading session Thursday free from the wide variants seen throughout the past fortnight as the correlation with election expectations eased. Sterling bounced off intraday lows at 1.2830 to touch session highs at 1.2910 on steady growth across manufacturing sectors. As investors attentions turn to next week' general election ongoing opinion polls will likely influence direction with analysts reluctant to commit to either side of trades while the wider race remains so broadly open.
The US Dollar was stronger overnight following strong leads from a number of domestic macro releases. The U.S. ADP Non-Farm Employment report showed a gain of 253,000 jobs, and a positive number on Manufacturing PMI as the industry continues at a solid pace of expansion. Despite a rise in US jobless claims for the month, the DXY was higher by 0.25% and advanced through 97.00. Interest rate futures have climbed to a 96% chance of a hike in the lead up to next months Fed Reserve meeting, as Fed Governor Powell overnight has continued to support hikes this year despite waning inflation. EUR/USD pulled back on general greenback strength but remains firmly above the 1.1200 handle. Top ranking officials in Germany have urged the ECB to start reducing its current monetary stimulus ahead of June 8th meeting with a possibility of easing bias tones removed. USD/JPY has paired yesterday' losses, squaring up to 111.40 ahead of Non-Farm Employment data this evening.
The New Zealand Dollar is weaker this morning when traded against its US counterpart. The Kiwi hit a 24-hours low of 1.0434 on the back of a stronger US labour market. Overnight in the US the ADP Non-Farm employment survey showed 253,000 jobs were added in May, compared to a forecast 174,000, boosting speculation the official non-farm payrolls data tonight will also be strong. The NZD/USD pair is currently trading at 0.7064. We now expect support to hold on moves approaching 0.7015 while any upward push will likely meet resistance around 0.7097. The Kiwi however extended its gains against the Aussie overnight off weaker iron ore prices and a drop in Chinese manufacturing activity. The AUD/NZD pair is currently trading at 1.0441 (0.9577). On the local data front, there are no economic data releases due out today.
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