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BY BRETT OTTAWA

FOMC meeting remains as the key focus


Australian Dollar

AUD / USD

Expected Range

0.7450 - 0.7600

Offering no underlying bias towards a near-term interest cut the Reserve Bank of Australia kept monetary policy settings unchanged yesterday. Having kept rates steady now since August last year, Governor Philip Lowe once again re-iterated that there continues to be some ongoing concerns over the level of household debt meaning rates are unlikely to go lower unless a large shock to employment was to transpire. Initially rallying to an intraday high of 0.7556 when valued against its US Counterpart the Australian dollar has since settled, opening only 10 basis points above where we saw it yesterday morning at a rate of 0.7532. Over the next 24 hours, this evening' Monetary Policy Statement from the US Federal Reserve is expected to garnish a significant level of attention.

Great British Pound

GBP / AUD

Expected Range

1.7100 - 1.7200

The Great British Pound continued its upward advance through trade on Tuesday following stronger than expected pickup in headline manufacturing. With many analysts pricing in a deterioration in manufacturing productivity throughout April the surprise uptick, driven by strengthening new orders and increasing domestic and foreign demand, forced the GBP back through 1.29. Having consolidated gains Sterling touched intraday highs at 1.2940 and appears poised to break above 1.30 for the first time since October last year. Attentions now turn to today' FOMC and Fed rate statement and monetary policy announcement for direction. A dovish or dour print commentary could be the catalyst needed to extend upside gains and push through 1.3080 – 1.3120.

Majors

USD, EUR, JPY

Expected Range

N/A

The Euro opened this morning little changed when valued against its US Counterpart still trading around the 1.0900 level. The EUR/USD has been in a tightening trading range since last week' French presidential election. The EUR/USD is currently trading at 1.0926. We now expect support to hold on moves approaching 1.0855 while any upward push will likely meet resistance around 1.0950. On the data front, today all eyes will be on the FOMC interest rate decision with the futures markets pricing-in less than a 5% probability of a rate hike at this meeting. Euro GDP is also due for release today with expectations for the first quarter to come in at 0.5%. Opening marginally lower this morning the US dollar is softer versus the Japanese (112.004) and the Pound Sterling (1.2933).

New Zealand Dollar

NZD / USD

Expected Range

0.6800 - 0.7000

Supporting the New Zealand dollar, dairy product prices advanced for a fourth consecutive time amid strong demand at a global auction held this morning. Capturing a high of 0.6940 when valued against its US Counterpart a relatively subdued Greenback has further offered a window of stability for the Kiwi which has etched some minor gains versus the worlds reserve currency thus far this week. In what' likely to test its near-term trajectory a quarterly labour market report is expected to show a further deterioration in the key job creation metric. Opening in stronger position the Kiwi currently buys 69.34 US Cents

BY JOEL HOLMES

US Manufacturing data disappoints – All eyes on RBA meeting


Australian Dollar

AUD / USD

Expected Range

0.7475 – 0.7600

Great British Pound

GBP / AUD

Expected Range

1.7000 – 1.7300

Recent Great British Pound gains were halted against its US counterpart as the Sterling retreated from highs of 1.2965 in overnight trading. Despite seeing the highest weekly close since September 2016, the cable cross was sold off as British banks observed May day and saw a European session low of 1.2915. Furthermore, news overnight of Brexit negotiations being short and complicated did no favours to the Pound, sliding further to close off the day at 1.2885. The Great British Pound opens lower against the Australian dollar - 1.7125 and New Zealand Dollar - 1.8650.

Majors

USD, EUR, JPY

Expected Range

N/A

Proving to be a mixed session for US equity markets, positive results from corporate America were balanced by a raft of tepid economic results. Whilst treasuries fell, US President Donald Trump generated some fireworks after comments made suggested he was willing to break up several of Wall Street' largest banks. Flat against a handful of its major counterparts the US Dollar was generally flat after a key macro indicator showed Factory activity during the month of March had missed forecast. Whilst a measure of consumer spending also fell short of its mark, overall it has been an uninspiring 24-hour window as witnessed by the tight trading bands across several of the major pairs. Opening stronger versus the Japanese Yen at a rate of 111.858, the US Dollar opens in a softer position versus the euro, swapping hands at a rate of 1.0902. On the horizon this evening second tier PMI reads across Europe offer limited buying opportunities as Thursday nights FOMC Statement is being groomed as the week' biggest inflection point.

New Zealand Dollar

NZD / USD

Expected Range

0.6850 – 0.7000

The New Zealand dollar has bucked its recent downside trend on geopolitical risks to see a 1% gain in overnight movements. With no major news out in the local session yesterday, Kiwi traded in a tight 25 pip range of 0.6850-0.6875. With the majority of European markets closed due to May holiday we saw thin trading and Kiwi trade higher to 0.6925. Any further advances to key levels of 0.70 US cents will be determined by this evenings GlobalDairyTrade auction, hoping for a fourth consecutive increase. The New Zealand Dollar opens this morning at 0.6905.

BY BRETT OTTAWA

All eyes will be on RBA meeting Tuesday


Australian Dollar

AUD / USD

Expected Range

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

Expected Range

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.

Majors

USD, EUR, JPY

Expected Range

N/A

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

Expected Range

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.

BY MATT RICHARDSON

Aussie tests technical supports and ECB forces Euro lower with dovish commentary


Australian Dollar

AUD / USD

Expected Range

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.

Great British Pound

GBP / AUD

Expected Range

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.

Majors

USD, EUR, JPY

Expected Range

N/A

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.

New Zealand Dollar

NZD / USD

Expected Range

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.

BY MATT RICHARDSON

AUD fails to capitalise on Greenback softness as U.S tax reform disappoints investors


Australian Dollar

AUD / USD

Expected Range

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 &frac12; 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>

Great British Pound

GBP / AUD

Expected Range

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.

Majors

USD, EUR, JPY

Expected Range

N/A

New Zealand Dollar

NZD / USD

Expected Range

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.

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