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BY BRETT OTTAWA

Aussie continues to slide


Australian Dollar

AUD / USD

Expected Range

0.7350 – 0.7500

The Australian Dollar is weaker this morning when valued against its US counterpart falling overnight low of 0.7383 on the back of continued weakness in commodity prices. It' the lowest level since 11th January 2017. According to Metal Bulletin the Iron Ore spot price closed lower at $US65.20. Yesterday trade surplus narrowed in March, resulting in surplus of A$3.11 billion. Locally today there are no economic data releases. The pair is currently trading at 0.7410. We now expect support to hold on moves approaching 0.7375 while any upward push will likely meet resistance around 0.7445.

Great British Pound

GBP / AUD

Expected Range

1.7400 – 1.7500

The Great British Pound was initially steady against the US Dollar during the Asian session, parked at 1.2880 until news broke of an impending emergency announcement from Buckingham Palace. Traders initially sold off Sterling to an intraday low of 1.2830 before calm was restored with news been immaterial to the markets. Sterling saw gains after a four month high on the latest Services PMI reading, supporting recent upbeat news for the British economy this week. Despite continued strong words between British PM Theresa May and President of the EU Council Donald Tusk, Sterling remained strong with eventual highs seen of 1.2930, and opens at 1.2920 this morning.

Majors

USD, EUR, JPY

Expected Range

N/A

Proving that the bullish undertones of the Greenback were short-lived following the FOMC' re-assurance that the economic softness witnessed during Q1 wasn’t likely to derail future interest rate hikes, the worlds reserve currency has since lost ground over the past 24 hours. Whilst US Stocks have been supported on strong earnings, crude plunged to a six-month low amid concerns over a supply glut. Dragging the Greenback lower, treasuries fell as data flows from the United States remained light. Pushing itself to within a whisper of the 1.1000 mark, encouraging macro indicators from the Eurozone have spurred interest in the shared currency as investors hold out hope that the ECB will look to curb bond purchases sooner rather than later. In what' set to dictate direction this evening, economists are forecasting that the US labour market will have produced 194000 new jobs during the month of April.

New Zealand Dollar

NZD / USD

Expected Range

0.6800 – 0.7000

The New Zealand Dollar edged lower intraday moving from a high of 0.6894 to a low of 0.6839 and is continuing to decline for a second consecutive week. Weighing on the NZD/USD pair is a drop in commodity prices and the possibility that the U.S still may get two rates hikes this year boosting the Dollar. Despite weaker than expected US economic data from the U.S Department of Labour, the kiwi was still dragged lower however, has recouped some losses since and is currently changing hands at 0.6870. Locally today we see the release of Inflation expectations for the first quarter of this year and then all eyes will be focused on tonight' US non-farm payroll data.

BY BRETT OTTAWA

Greenback rallies after FOMC's monetary policy statement


Australian Dollar

AUD / USD

Expected Range

0.7375 – 0.7475

<div> On the back of the US FOMC's monetary policy statement last night the Australian Dollar fell to its lowest level since mid-January at 0.7419, down 110 pips, or 1.45 per cent, for the session. The U.S. Federal Reserve kept interest rates unchanged on Wednesday and emphasized on the strength of the labor market in its statement. The pair is currently trading at 0.7424. We now expect support to hold on moves approaching 0.7390 while any upward push will likely meet resistance around 0.7445. Attentions now turn to today' trade balance figures at 11.30 AEST for the month of April.

Great British Pound

GBP / AUD

Expected Range

1.7200 – 1.7400

The Great British Pound continued to consolidate at 1.2900 against the US Dollar yesterday as it has outperformed most major currencies in the last 30 days. Starting the day at 1.2950, a solid Construction PMI figure reading did little to help the Sterling as it drifted off positive movements. UK construction hit a four month high, showing an upbeat number of employment in the industry. Continued Brexit costs continue to hamper any solid advances through the 1.3000 region as we look towards UK snap elections on the 8th June. The Pound eventually settled lower as the 1.29 handle was broken in the North American session, as the FOMC left interest rates on hold and saw eventual lows on open this morning of 1.2865. The British pound opens higher against the Australian Dollar &ndash; 1.7330 and New Zealand Dollar &ndash; 1.8700.

Majors

USD, EUR, JPY

Expected Range

N/A

New Zealand Dollar

NZD / USD

Expected Range

0.6800 – 0.7000

The New Zealand Dollar rose yesterday following stronger than expected employment figures for the first quarter of 2017. As employers added more workers to the economy at a pace of 1.2% , the unemployment rate dropped to 4.9% down from 5.2% the previous quarter. The NZD/USD touched 0.6968 a six-day high following the news, however, as the figures were further dissected by investors wage inflation which is a key measure of underlying growth was unchanged at 0.4%. The pair began to decline and fell to an eventual low of 0.6867 as the U.S Federal Reserve left interest rates unchanged following its two-day policy meeting. In the policy statement they downplayed weak first-quarter economic growth and reiterated the strength of the US labour market, a sign the Fed may move in June. Looking ahead, ANZ Commodity Prices due today.

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 &ndash; 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 &ndash; 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.

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