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BY MATT RICHARDSON

Aussie struggles amid range bound trade; USD extends recovery


Australian Dollar

AUD / USD

Expected Range

0.7580 – 0.7730

The Australian Dollar edged marginally lower through trade on Thursday succumbing to broader US Dollar gains while holding onto a tightening trading band. Having broken higher in early trade to touch 0.7680 the Aussie shifted downward and moved back through 0.7650 touching intraday lows at 0.7641. The Aussie has again fallen into a range bound pattern and is struggling to break outside levels between 0.7580 and 0.7730. Having failed to break topside resistance investors are seeking a catalyst to break trading patterns with a move through 0.76 and a 200 day moving average at 0.7550 could signal a deeper move lower toward supports at 0.7380. Attentions now turn to a raft of U.S macro drivers for direction into the weekend.

Great British Pound

GBP / AUD

Expected Range

1.6200 – 1.6400

The Great British Pound managed to post some mild gains when valued against its US Counterpart on Thursday, temporarily reaching a high of 1.2523 before later falling. Whilst the Greenback has shone brighter than many of its peers over the past 24 hours the Sterling' performance overall has been relatively solid notching up gains worth 0.3 percent. Whilst trading one and half cents below the highs captured earlier in the week the Sterling will be given a further opportunity to track back towards resistance at the 1.2500 mark ahead of the release of current account and GDP prints tonight. This morning the Great British Pound opens higher versus the Greenback (1.2469), the Aussie (1.7804) and the Kiwi (1.6301).

Majors

USD, EUR, JPY

Expected Range

N/A

The U.S Dollar continued its upward march through trade on Thursday breaking higher against both the Euro and the Japanese Yen. An uptick in 4th quarter GDP and steady unemployment claims bolstered speculation the U.S recovery remains on track and offered stark contrast to declining CPI inflation prints across Spain and Germany. Localised price pressures across Europe appear to have waned throughout March and forced the Euro below key technical supports at 1.07. The break lower triggered a series of sell orders and compounded Euro losses throughout the session forcing the 19 nation combined unit to intraday lows at 1.0673. The dollar has enjoyed strong gains against the Euro since touching 4 month lows on Tuesday, recouping 230 plus points across two consecutive daily advances. With investors repositioning themselves and unwinding last week' largely overdone USD sell off attentions now turn to a raft of Macroeconomic indicators, headlined by the US Core PCE index for direction into the weekend.

New Zealand Dollar

NZD / USD

Expected Range

0.6830 – 0.7030

Having consistently rejected topside advances this week the New Zealand dollar has stalled when valued against its US Counterpart. Focused towards an area close to the 70 US Cents mark, trading ranges have comfortably been contained over the past 24 hours that is despite a broader bias towards the worlds reserve currency amid murmurings that the pace of rates rises from the FOMC may be quicker that what markets have priced in. In what' shaping up as uneventful end to the week a raft of macro events from the United States this evening will be the main driving force ahead of several key prints from China early next week. Opening weaker the New Zealand dollar currently buys 70.06 US Cents.

BY MATT RICHARDSON

Aussie rallies on uptick in commodities


Australian Dollar

AUD / USD

Expected Range

0.7580 – 0.7720

The Australian dollar has extended gains overnight from yesterday' flat trading session to reach two week highs. A range bound Aussie saw movements initially between 0.7630 and 0.7655 in the Asian session before seeing a high of 0.7675 on this morning' open. Renewed risk appetite on commodity currencies continue to see gains for the Australian dollar. It now looks to continue its advance to test topside levels of 0.77 against the American dollar ahead of HIA new home sales data released this morning.

Great British Pound

GBP / AUD

Expected Range

1.6030 – 1.6330

The Great British Pound saw further weakness in the Asian trading session yesterday, sold off from 1.2460 to an intraday low of 1.2380 as traders positioned themselves in preparation for the Trigger of Article 50 of the Lisbon Treaty. Despite seeing pressure early in the European session, the Sterling was resilient and saw an overnight high of 1.2470, selling on the rumour and buying on fact as Prime Minister Theresa May officially confirmed the UK will be leaving Europe in an expected timeframe of two years. Further ahead the cable cross looks towards American GDP figures for the quarter and Unemployment claims in the North American session this evening. The Sterling opens lower against the Australian dollar (1.6210), along with the New Zealand dollar (1.7670).

Majors

USD, EUR, JPY

Expected Range

N/A

New Zealand Dollar

NZD / USD

Expected Range

0.6980 – 0.7080

The New Zealand dollar edged higher through trade on Wednesday shrugging aside wider USD gains and holding on above the 0.70 handle. Having touched intraday lows at 0.6994 the Kiwi bounced off supports and moved higher into northern hemisphere trade. An uptick in commodity prices helped bolster demand for commodity driven currencies and the NZD moved to touch intraday highs at 0.7039. The Kiwi has maintained a relatively tight trading band through much of the last fortnight and appears largely range bound while market participants sit back, reluctant to extend positions before obtaining a deeper insight into the successful implementation of President Trump' reflation policies.

BY MATT RICHARDSON

Political uncertainty as Britain set to invoke Article 50


Australian Dollar

AUD / USD

Expected Range

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

Expected Range

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).

Majors

USD, EUR, JPY

Expected Range

N/A

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

Expected Range

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.

BY MATT RICHARDSON

Trump effect weighs heavy on dollar


Australian Dollar

AUD / USD

Expected Range

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.

Great British Pound

GBP / AUD

Expected Range

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.

Majors

USD, EUR, JPY

Expected Range

N/A

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.

New Zealand Dollar

NZD / USD

Expected Range

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.

BY MICHAEL JUDGE

Markets flat as the Trump trade loses its shine


Australian Dollar

AUD / USD

Expected Range

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.

Great British Pound

GBP / AUD

Expected Range

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.

Majors

USD, EUR, JPY

Expected Range

N/A

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.

New Zealand Dollar

NZD / USD

Expected Range

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.

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