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AUD / USD
0.7400 – 0.7550
The Australian dollar edged marginally lower through trade on Friday testing key supports and touching intraday lows at 0.7459. With little domestic data on hand to drive direction, the AUD bounced off lows as investors issued a temporary defence on moves at or about the current 100 day moving average and 0.7460/70. The Aussie has been entrenched in a downward spiral over the last 5 – 6 weeks and while the speed of the downturn seems to have abated somewhat the commodity driven unit is still vulnerable to further downside risks. Attentions this week turn to key central bank announcements with the RBA meeting Tuesday and the FOMC sitting Wednesday important markers for short-medium term direction. While both central banks are expected to maintain their current monetary policy platforms there is scope that a hawkish Fed may underpin further Greenback gains and force the AUD lower.
Great British Pound
GBP / AUD
1.7200 - 1.7400
The Great British Pound edged higher through trade on Friday consolidating gains above 1.29 and ensuring the current relief rally remains intact. Sterling rallied strongly throughout April and despite meeting short term resistance in near term holding patterns could break through 1.30 should the Fed fail to expand on its hawkish base and proffer a clearer path to monetary policy changes. A decline in consumer spending and slowdown in first quarter GDP could force the FOMC to maintain a cautious stance, especially if non-farm payroll numbers fall short. Having enjoyed strong gains on the back of the French election result and the announcement of a local election later this year the Cable could mean a consolidated push through 1.3100 while a close below 1.2860 may force a correction back toward supports at 1.2680. Attentions this week turn to the U.S Federal Reserve and Non-Farm Payroll numbers with Manufacturing, Services and Construction PMI dominating local direction.
USD, EUR, JPY
The US dollar closed the week up against commodity-related currencies. The AUD/USD pair fell to its lowest since early January settling at 0.7481 after reaching a low of 0.7467. There were mixed fortunes for the Greenback against the Euro. The EUR/USD pair reached a fresh high of 1.0910. The EUR/USD is currently trading at 1.0901. We now expect support to hold on moves approaching 1.0855 while any upward push will likely meet resistance around 1.0910. Due to the Labour Day public holiday there are no data releases for today. The pound sterling managed to extend its rally against its US counterpart reaching a high of 1.2942. The GBP/USD pair is currently trading at 1.2928 with all eyes on the psychological barrier at 1.3000. On the US data front, attentions today will turn to the release of US Manufacturing PMI for the month of April.
New Zealand Dollar
NZD / USD
0.6800 - 0.7000
The New Zealand Dollar has had another unfortunate week when valued against its US Counterpart and closed the month of April at a ten-month low at 0.6838 - a level not witnessed since June 2016. Despite a weak Q1 US GDP print, the Greenback moved 3% higher last week against the Kiwi as growing concerns about U.S protectionist policies. The U.S government announced stricter tariffs on softwood lumber imported from Canada and believe it is just a matter of time before the U.S takes against their trade, in particular the dairy market. Looking ahead, local data is light until Wednesday where we will see the release the employment figures.
0.7380 – 0.7530
The Australian Dollar remained on the back foot and unsuccessful at an attempt to break above 75c against the US Dollar. The AUD/USD pair moved from high of 0.7492 to a low of 0.7439 and despite weaker than expected US economic data overnight for both Initial Jobless Claims and Durable Goods the Greenback traded higher. Meanwhile, locally in a report released by ABS Q1 export prices rose much quicker than import prices giving another boost to Australia' term of trade. Export prices rose 9.4% and import prices rose 1.2% for the March quarter. Low tier data PPI and Private Sector Credit due today, near term support lies at 0.7440.
1.7175 – 1.7425
The Great British Pound is higher this morning against its US counterpart reaching an overnight high of 1.2916. The pound sterling is currently trading near its highest level since Sept 2016 against the Greenback as Brexit talks dominate the political landscape. On the data front, today will see the release of Q1 GBP with expectations the economy grew by 0.4% in the first quarter of the year, following a 0.7% advance in the previous quarter. Today' economic calendar also features the release of BBA Mortgage Approvals with market forecast of 42.1K approved mortgages for the month of March, down on the previous month 42.6K. The GBP/USD is currently trading at 1.2901. We now expect support to hold on moves approaching 1.2870 while any upward push will likely meet resistance around 1.2920.
The U.S dollar edged higher against the Euro through trade on Thursday forcing the 19 nation combined unit back below 1.09. The Euro came under selling pressure after ECB President Mario Draghi failed to proffer real insights into reducing the Banks quantitative easing program. Investors had hoped policymakers might adopt a more hawkish tone and suggest a reduction in bond buying and tightening of loose monetary conditions may commence later this year. In a press conference following the Banks monthly meeting Draghi stressed the pressures facing Central Bank officials had fostered a cautious approach to monetary policy amendments. Touching intraday lows at 1.0853 the Euro opens this morning buying 1.0873. Meanwhile the Japanese Yen opens largely unchanged enjoying small levels on support after the BoJ offered its most upbeat assessment of economic growth prospect in almost a decade. While failing to amend its current policy platform the BoJ upgraded their expectations for growth yet conceded price pressures and inflation remained stagnant and a drag on the economy. Having forced the USD to intraday lows at 111.06 the USD/JPY open this morning at 111.25 as attentions turn to advance 1st quarter GDP numbers as a marker of U.S economic health.
0.6840 – 0.6940
Opening yesterday at 0.6890, The New Zealand Dollar hit an intraday high of 0.6920 before breaking lower. The Kiwi was one of the worst performing currencies in overnight trading falling as much as 1% and testing key support at 0.6850. United States unemployment claims and durable goods orders somewhat disappointed, allowing the Kiwi to recover slightly and opens at 0.6880. The New Zealand Dollar takes its direction from local Trade Balance and Building Consent data out this morning.
0.7440 – 0.7580
<div>The Australian Dollar opens lower against the Greenback this morning unable to hold above the 75c handle on the back of weaker than expected Australian inflation data yesterday. The annual rate of inflation rose to 2.1% in Q1 of 2017, from 1.5% in Q4 of 2016, the first print above 2% in 2 ½ years. However, underlying inflation stood at a quarterly rate of 0.4% and at an annual pace of 1.8%, still below the RBA' target band. With job growth and wage growth slow but house prices are still increasing it is unlikely the RBA will look at raising rates in the near future. The Aussie moved from highs of 0.7552 to an eventual low of 0.7454 a level not witnessed since January 17th. Locally we see the release of Import Prices ahead of the RBA Governor due to speak in the evening at the Renminbi Global Cities Dialogue Dinner in Sydney.</div>
1.7025 – 1.7425
The Great British Pound edged marginally higher through trade on Wednesday consolidating recent gains and touching intraday highs at 1.2860. With little domestic data on hand to drive direction the GBP found support in disappointing tax reform proposals issued by the White House and a paring of recent USD gains. Having touched intraday lows at 1.2805 Sterling rebounded and seems to be reasonably well bid with supports at 1.28 and 1.27 as attentions turn to Friday' prelim CPI print as a key marker for direction leading into the weekend.
0.6820 – 0.7020
Headlines were dominated by tax reforms in the United States overnight as broad USD strength weighed heavily on the New Zealand Dollar. Starting the day at 0.6950, the Kiwi fell to an eventual overnight low of 0.6870 during the North American session against the US Dollar and tests March support. The Kiwi underperformed against the majority of currencies and with a lack of domestic data, will take cues from further offshore news as central banks in Japan and Europe take focus. The Kiwi opens this morning at 0.6890.
0.7480 - 0.7580
The Australian Dollar moved within a 20-pip range intraday yesterday as financial markets were closed observing the ANZAC public holiday. Once European markets opened the Australian dollar was dragged lower despite more risk appetite as geopolitical risks faded and higher commodity prices. AUD/USD fell from a high of 0.7572 to a low of 0.7520, the pair has since regained some losses at sits at 0.7535 at the time of writing. Locally sees the release of Australian CPI data which analysts consider one of the most important economic indicators. The forecast is expected to increase by 0.6% for Q1 2017.
1.6875 - 1.7175
The Great British Pound opened this morning little changed when valued against its US Counterpart with the Sterling reaching an overnight high of 1.2845, up 0.33% on the day. With little to no macroeconomic data out of the UK today all eyes will be on the election polls, and the anticipated size of the Conservative majority in the upcoming UK elections. In the last week, the Pound Sterling has rallied over 300 points against the Greenback after Prime Minister Theresa May called of a snap election. The GBP/USD is currently trading at 1.2833. We now expect support to hold on moves approaching 1.2770 while any upward push will likely meet resistance around 1.2920.
The U.S dollar enjoyed mixed fortunes through trade on Tuesday rallying against the Yen, Mexican Peso and Canadian Dollar while touching near six month lows against the Euro. The Greenback surged against the Canadian Dollar and Mexican Peso after the Trump administration announced a Tariff on the import of Lumber from Canada. The announcement is seen as a marker for future trade discussions and highlights the approach of the Trump government toward NAFTA and the future of the 20-year-old trade agreement. The Euro continued higher moving through 1.0950 as investors’ confidence in a centrist victory in next month' French election were bolstered as Emmanuel Macron' victory in the first round of voting was confirmed. The result eliminates a large portion of uncertainty surrounding the future of the Euro and European Union and prompts many market participants to expect a hawkish shift in sentiment from the ECB and a reduction in monetary stimulus. Attentions now turn to the Trump administration and the release of key Tax reforms Wednesday ahead of an ECB meeting and monetary policy comment Thursday as symbols for short to medium term direction.
0.6920 - 0.7020
The New Zealand dollar broke 0.70 against the American Dollar as commodities currencies saw downside movements on thin liquidity, in the biggest daily loss since March. The Kiwi was also hampered by the Canadian Dollar, as tariffs were announced by the United States on soft lumber imports. As New Zealand observed the annual ANZAC public holiday, Kiwi drifted to an intraday low of 0.6985. Markets saw an overnight low of 0.6940 due to a risk on environment, and flows back into the USD. Local data set sees the release of Visitor Arrivals for April and Credit Card spending for the year as the New Zealand dollar opens at 0.6950 this morning.
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