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AUD / USD
0.7570 - 0.7670
The Australian dollar drifted lower in the local session yesterday testing key resistance levels late in the afternoon. Seeing an intraday high of 0.7630 we saw the dollar decline to an eventual low of 0.7590 to start the European session. While the US dollar index firmed higher, the Trump trade continues to be questioned as markets await further news on policy. The Australian dollar reversed all losses in overnight trading seeing an eventual high of 0.7655 supported by a rally on oil and rebound in iron ore prices after several days of losses. The Australian dollar opens at 0.7630 this morning.
Great British Pound
GBP / AUD
1.6175 - 1.6575
The Great British Pound tested topside resistance of 1.2600 against it US counterpart heading into the European session yesterday. The Sterling was then battered on a combination of higher US consumer confidence level and markets positioning themselves ahead of Article 50 official trigger date this evening. This will begin a two-year process of the UK preparing their exit from the European Union. The Cable cross started its decline from its highs of 1.2600 to end the North American session at eventual lows of 1.2440. The Great British Pound opens lower against the Australian Dollar (1.6325) and New Zealand Dollar (1.7760).
USD, EUR, JPY
The U.S Dollar advanced through trade on Tuesday reversing the recent downward trend in the face of wider political uncertainty and an uptick in key macroeconomic indicators. Buoyed by improvements in consumer confidence and supported by commentary from key Fed Officials the Dollar advanced across the board. Consumer confidence touched 16 year highs while Fed Vice Chair Stanley Fischer Bank of Dallas President Robert Kaplan both supported an additional two hikes throughout the year widening the Greenback' yield advantage over the Euro and Yen while narrowing the Gap to high yielding emerging markets. The Dollar touched intraday highs at 111.20 JPY while the Euro fell sharply touching intraday lows at 1.0799. Market participants looked to short the 19 nation combined unit as political uncertainty escalates ahead of Britain' admission of Article 50 and the commencement of Brexit negotiations.
New Zealand Dollar
NZD / USD
0.6950 - 0.7050
The New Zealand dollar edged marginally lower through trade on Tuesday touching intraday lows at 0.7008. With little domestic data on hand to steer investors the Kiwi was at the mercy of wider USD sentiment and currency flows. The Greenback advanced across the board while the NZD found support on moves approaching the 0.70 handle. Despite broader USD weakness of late the Kiwi failed to extend upside momentum and the recent sell off suggests the door may be open to revisit lows approaching 0.68. As the carry trades attractiveness diminishes the demand for the Kiwi and its yield advantage narrows with investors still extending USD longs on bets the Fed will raise rates twice more this year. Attentions today turn to the UK and Britain' submission of Article 50.
0.7580 – 0.7660
The Australian Dollar is slightly weaker today when valued against its US counterpart falling overnight low of 0.7608, down 0.237 per cent for the session. A fall in the Aussie comes off the back of Iron Ore future prices which fell overnight to its lowest level since early February. A quiet trading session ahead today with no macroeconomic news out of Australia. The Aussie will likely keep trading according to sentiment for the most part of this week. The AUD/USD pair is currently trading at 0.7615. We now expect support to hold on moves approaching 0.7604 while any upward push will likely meet resistance around 0.7659.
1.6350 – 1.6650
The Great British Pound recovered some ground on Wednesday reaching an overnight high of 1.2615, but overall remains weak against the greenback. Quite trading session yesterday with no macroeconomic news out of the UK. All eyes this week will be on Prime Minister Theresa May as she will announce to Parliament on Wednesday that Article 50 has been triggered. Triggering Article 50 is the beginning of Britain' two-year withdrawal from the EU. Article 50 has never been triggered before so moving forward is a bit of an unknown. There are no macroeconomic data releases set for today. The GBP/USD is currently trading at 1.2559.
The U.S Dollar slumped through trade on Monday touching its lowest level since Trump' Presidential victory in November. Falling against a basket of major currency counterparts the dollar again looked vulnerable as market participants looked to wind down USD holdings on expectations the Trump administration will fail to deliver on pro-growth policies. Investors’ confidence in the Republican' ability to deliver on tax reform and infrastructure spending was damaged following Trump' failure to push through healthcare amendments. The defeat of Trumps healthcare reform bill is a major blow to dollar bulls expecting the Republican to meet little resistance in initiating wide reaching, pro-growth restructuring and fiscal stimulus. The Dollar fell against the Japanese Yen touching intraday lows at 110.13 while the Euro breached 1.09 for the first time in 5 months. With little headline data on the docket today attentions and direction will continue to be driven by sentiment surrounding Trump and his promised American revolution.
0.7010 – 0.7080
The New Zealand dollar edged higher through trade on Monday holding onto gains above 0.70 and touching intraday highs at 0.7067. Despite wanning USD sentiment and broader Greenback weakness the Kiwi failed to extend the rally as a dip in commodity prices and dampening demand for risk capped upward momentum. The NZD despite benefiting from softness in USD demand remains vulnerable to selling on rallies. There is still an expectation the Fed will raise rates at least twice this year subsequently narrowing the gap between FOMC and RBNZ monetary policy platforms and eroding the NZD' yield advantage. With little on the docket today attentions remain with wider USD sentiment and we expect a narrow range through much of the session.
0.7580 – 0.7710
The Australian dollar is virtually unchanged when valued against the US counterpart. In early Asian trade on Monday the Aussie is holding comfortably above 76 cents, unable to benefit from any US dollar weakness. The AUD/USD pair reached an overnight high of 0.7641. On the data front, today, quiet again locally, the Aussie will look offshore at the US tax reforms which will remain the dominant theme. Apart from Thursdays HIA New Home Sales for the month of March the Aussie will likely keep trading according to sentiment for the most part of this week. The AUD/USD pair is currently trading at 0.7630. We now expect support to hold on moves approaching 0.7600 while any upward push will likely meet resistance around 0.7650.
1.6300 - 1.6450
The Great British Pound is weaker today when valued against its US counterpart falling overnight to 1.2489. The GBP/USD pair reached a 24-hour high of 1.2494 unable to advance through the 1.2500 level. On the data front, in a light week for economic data, attentions will turn to the formal triggering of Brexit on Wednesday which will headline the UK calendar this week. Followed by Friday' release of Quarterly Gross Domestic Product which is expected to rise 0.7% quarter/quarter which suggests that the UK economy is on the up-and-up.
In assessing the fall-out from Donald Trump' failed health-care vote on Friday, broader questions have continued to be raised in regards to the new administrations ability to now push through its pro-growth agenda. Whilst US equity markets bounced from a session low the S&P 500 endured its worst week since the election last November as political wrestling infiltrated and dominated new flows. Emphasising the importance which is now being placed on the implementation of Trump' top level campaign pledges, the euphoria which surrounds the world' largest economy threatens to be de-railed further should policy makers failure in their efforts to have other priorities such as key tax reforms passed. Down 1.6 percent for the month, the US Dollar edged lower when valued against a handful of its major peers, its slide most evident versus the Japanese Yen which opens notably stronger this morning at 111.312. Overcoming a relatively uneventful start the economic calendar is expected to heat up mid-week ahead of the release of consumer confidence and growth data from the United States.
0.7000 - 0.7080
Keeping its head above water for much of Friday' session the New Zealand dollar finished last week at a similar level to where it was left, trading up above the 70 US Cents mark when valued against its US Counterpart. Exposing its soft underbelly the New Zealand dollar has struggled to advance in the near-term that is despite being paired against a Greenback which has shed 1.5 percent. Whilst falling dairy prices and shrinking interest rate differentials have lowered its appeal, RBNZ Governor Graeme Wheeler re-affirmed last week that there remains a need for a lower Kiwi to further a more balanced growth story. Opening steady versus the Greenback the New Zealand dollar currently swaps hands at a rate of 0.7028.
0.7550 – 0.7700
Despite pushing through key resistance areas this week and reaching highs of 0.7750, The Australian dollar has declined just under 1% over the past 24 hours and could see 0.7600 support taken out over the coming days. Trading in a tight range in the domestic session of 0.7655 – 0.7675, we saw an overnight low 0.7630 in overnight trading. Markets hoping for an update in monetary policy outlook by Fed Reserve Chair Janet Yellen were left disappointed in her speech as investors look to further rhetoric by FOMC members heading into the weekend. A quiet day on the local docket, the Australian dollar opens at 0.7625.
1.6360 – 1.6480
Breaking through resistance at the 1.2500 barrier when valued against its US Counterpart yesterday, the Great British Pound has attracted renewed buying interest over the past 24 hours. Buoyed by a retail sales read which showed the quantity of purchases rose by 1.7 percent last month when compared to January' result, signs of buying strength across the household sector were well received by the broader market. Whilst Greenback bulls were kept comfortably in check following news that House Republicans had postponed a vote on an important health-care bill, near-term USD trajectory remains clouded as questions remain over Trumps ability to push pro-growth policies through Congress. Topping out a high of 1.2531 the Sterling opens stronger versus the Greenback (1.2522), Aussie (1.6415) and the Kiwi (1.7816).
The US Dollar index was steady after a week of declines, seeing no change at 99.75 in the current risk off environment. Most currency pairs have traded in a tight range as equity and currency markets await Trumps health care bill decision in congress. United States unemployment claims of 258,000 were slightly above expectations climbing to a seven week high. The Euro traded in a tight thirty pip range against the Greenback 1.0770-1.0800, with the USD/JPY continued downside momentum seeing an intraday low of 110.60. Markets will take its cues from a number of key FOMC officials speaking over the next 24 hours.
0.7000 – 0.7050
Remaining firmly in the neutral camp the RBNZ' decision in keeping underlying policy settings unchanged had a muted impact on the New Zealand dollar yesterday. Falling well short of spurring any significant degree of interest investors have opted to play a somewhat secondary role this week as witnessed by the unusually tight trading ranges across the NZD/USD pair. Opening this morning 0.1 percent lower than Monday' starting point the upcoming vote on the US healthcare bill is being touted as the next major hurdle for the world' reserve currency hence having broader implications for New Zealand' domestic unit. Currently swapping hands a rate of 0.7025 when valued against its US Counterpart, today' session is once again shaping up as a relatively tame one.
0.7600 – 0.7730
The Australian dollar having maintained a relatively tight 49-point trading range throughout much of its domestic session, is relatively unchanged this morning when compared to the US Dollar. The AUD/USD pair reached an overnight high of 0.7688. On the data front, today, quiet again locally, the Aussie will look offshore at the US as Federal Reserve chair Janet Yellan will be in action tonight. The Aussie will likely keep trading according to sentiment for the remainder of this week as the local calendar remains empty. The AUD/USD pair is currently trading at 0.7672 down 0.14 per cent over the last 24 hours. We now expect support to hold on moves approaching 0.7640 while any upward push will likely meet resistance around 0.7700.
1.6200 – 1.6300
The Great British Pound attempted to break resistance at 1.2500 early on in the European session but failed to crack through February highs. With broader weakness on markets in a risk off environment, the Sterling was sold off to eventual lows of 1.2430 as reports of a Terrorist attack in London filtered through. No further news on Brexit as investors wait for the trigger of Article 50 on March 29th. Cable erased all losses in the North American session to rally back to 1.2490 at the end of trading. The Great British pound opens flat against the Australian dollar (1.6270) and New Zealand Dollar (1.7750)
0.6940 – 0.7140
Once again the New Zealand dollar traded in a tight range yesterday between 0.7015-0.7040 with little to no data in the domestic trading session. As the Reserve Bank of New Zealand continues to maintain its neutral stance on monetary policy, interest rates were kept on hold in this morning' official cash rate decision at 1.75%. The Kiwi initially rose in overnight trading to a high of 0.7075 before being sold off post RBNZ announcement to a low this morning of 0.7040. Governor Wheeler made no change to New Zealand' economic outlook in its latest statement as markets continue to price no further movements in the OCR rate this year.
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