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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.

BY SHAMEEM MUSA

U.S. Dollar underperforms after PMI misses expectations


Australian Dollar

AUD / USD

Expected Range

0.7500– 0.7600

The Australian Dollar steadied through trade on Friday edging higher into the weekly close and consolidating above 0.7550. With minimal macroeconomic data on hand to drive direction the AUD found support in stronger commodity prices, lead by a resurgence in gold, while the USD suffered heavy selling as investors questioned the likelihood of additional Federal Reserve monetary policy action. Despite commentary from FOMC and Fed officials supporting continued tightening of monetary policy conditions, a string of softer macroeconomic data sets, a perceived imbalance in economic growth and the pall of weak inflation weighed heavily on the world' base currency and investors looked to dump the greenback. The Aussie bounced off intraday lows at 0.7536 to touch session highs at 0.7577 and opens this morning buying 0.7566 U. S cents. With its fortunes heavily tied to US monetary policy expectations attentions now turn to U.S Durable Goods Orders for direction through Monday.

Great British Pound

GBP / AUD

Expected Range

1.6750– 1.7000

Majors

USD, EUR, JPY

Expected Range

N/A

Markets were relatively flat on Friday as the U.S. Dollar saw small losses against G10 currencies. Both Flash Manufacturing and services PMI numbers slowed for the month of June, although still showing a stage of expansion. The U.S. Dollar index closed 0.25% down for the day after one month highs set earlier in the week. Both equity and treasury markets were unchanged. The Euro was sent higher this week after a number of strong manufacturing PMI readings in France and Germany. Hitting a weekly low of 1.1120 on Tuesday, The EUR/USD cross ended the week higher just below the 1.12 handle with further direction dictated by ECB president Mario Draghi' speech this evening. USD/JPY was little changed, moving slightly lower to 111.20 and could look to retest weekly lows at 111.00 dependent on Treasury yield movements. And finally FOMC Member James Bullard reiterated that the Fed are watching inflation data closely, dictating any future interest rate rises.

New Zealand Dollar

NZD / USD

Expected Range

0.7200 – 0.7300

The New Zealand dollar finished higher against the Greenback in New York trading on Friday. The Kiwi reached a high of 0.7281, up from 0.7267 cents in Asia last week. Quiet day ahead locally with no economic data releases scheduled. Looking at the week ahead tomorrow will see the release of Trade Balance for the month of May. On Thursday, monthly ANZ Business Confidence and finally business confidence on Friday, which will provide an update on how the domestic economy may be faring. The NZD/USD pair is currently trading at 0.7280. We now expect any upward push will likely meet resistance around 0.7320. The kiwi dollar rose to 0.9624 (1.0391) Australian cents from 96.10 (1.0405) cents in New York on Friday.

BY MATT RICHARDSON

Kiwi is the day's big earner as wider markets remain flat


Australian Dollar

AUD / USD

Expected Range

0.7480 – 0.7630

The Australian dollar opened the Australian trading session down against the Greenback for the fourth consecutive day after gaining initially during the American session. Following a sharp correction downwards, the pair oscillated between 0.7561 and 0.7537 to ultimately tread water around the 0.7540 mark. The continual, incremental decline of the Aussie this week has primarily been driven by a softening equities market and broader macro-economic clues in the international market. Closing out the week, the Aussie looks to off shore clues for further direction. The lack of domestic data continues next week with direction being derived from overseas announcements including US GDP and Unemployment Claims.

Great British Pound

GBP / AUD

Expected Range

1.6750 – 1.6950

The Great British Pound is slightly weaker this morning when valued against the US Dollar. The Pound Sterling hit an overnight low of 1.2654. Prime Minister Theresa May was in Brussels as she holds talks on Brexit with EU leaders for the first time since losing her majority at the general election. British Prime Minister Theresa May is trying to form a majority government. On the local data front, there are no macroeconomic data releases scheduled for today. The GBP/USD pair is currently trading at 1.2678. We now expect support to hold on moves approaching 1.2630 while any upward push will likely meet resistance around 1.2690.

Majors

USD, EUR, JPY

Expected Range

N/A

The U.S Dollar held near one month highs through trade on Thursday as the markets and investors appeared to merely mark time and take stock of recent gains in what was a session free of headline domestic data. An uptick in house prices and steady labour market data were offset by a lower bond and treasury yields as demand for the worlds base currency falters and investors amend long positions. Maintaining a 50-point range against the Yen the dollar opens this morning buying 111.30 JPY while the Euro moved marginally lower, slipping through 1.1150 to touch intraday lows at 1.1139. Attentions now turn to a raft of European Manufacturing and services data for direction into the weekend. With support for the 19 nation combined unit growing on improved macroeconomic indicators and whisperings of amendments to quantitative easing on the rise then a strong print could force the Euro back toward resistance at 1.1190/1.12.

New Zealand Dollar

NZD / USD

Expected Range

0.7180 – 0.7280

The New Zealand Dollar saw minimal movements yesterday as it remains in this week' trading range between 0.72 and 0.73 cents against the US Dollar. Early movements higher on Thursday were supported by RBNZ' decision to keep interest rates on hold as expected at the benchmark rate of 1.75%. RBNZ Governor Glenn Wheeler expects an uptick in economic growth domestically, advancing the Kiwi higher to 0.7265 before trading sideways till close. Markets are now pricing a 60% chance of the next rate move to be higher by Mid 2018 as inflation remained moderate with expectations to increase gradually. With little economic news releases offshore, volatility was low overnight as the NZD/USD cross hit an overnight high of 0.7272 and opens at 0.7260 this morning.

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