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SHAMEEM MUSA

Dollar continues to fall on political worries


Australian Dollar

AUD / USD

Expected Range

0.7340 – 0.7500

Great British Pound

GBP / AUD

Expected Range

1.7400 - 1.7600

The Great British Pound is stronger today when valued against its US counterpart. Despite ending the day higher against the Greenback, the British Pound failed again to hit 1.3000, reaching an overnight high of 1.2990. Yesterday on the data front, the unemployment rate fell to 4.6% in the three months to March, the lowest in over four decades. Looking ahead today will see the release of April retail sales with expectations of an increase by 1.0% in the month after March's 1.8% decline. The GBP/USD pair is currently trading at 1.2970. We now expect support to hold on moves approaching 1.2900 while any upward push will likely meet resistance around 1.2995.

Majors

USD, EUR, JPY

Expected Range

N/A

The Greenback has extended further losses on the currency front when valued against its major counterparts. The US Dollar Index which measures the USD' strength against a trade-weighted basket of six currencies closed at 97.39 and down 0.80% - a fresh six-month low. The US Dollar has come under pressure after news broke that President Trump has asked former FBI Director James Comey to end the agency' investigation into ties between former White house national security advisor and Russia. EUR/USD has benefited, moving towards an eventual high of 1.1170 also assisted by weaker US housing data and odds for a June rate hike dropping further according the CME' FedWatch Tool. In a separate note Japanese Machine Orders were less than expected rising 1.4% in March vs an increase of 2.6%, despite the data raising concerns about the outlook for Japanese business investment USD/JPY has weakened further touching a three-week low.

New Zealand Dollar

NZD / USD

Expected Range

0.6840 - 0.6980

It was a relatively quiet session on domestic markets yesterday as the New Zealand dollar traded in a tight twenty-point range between 0.6880 and key resistance levels at the 0.6900 handle. The New Zealand March quarter reading for PPI was higher than expected as producer prices continue to climb. This was due to higher prices in dairy products and crude oil but this did little to move the Kiwi on release. Most movements in the NZD were in the North American session as political unrest took place once again in the United States. Equities were sold off, along with the US Dollar with the NZD/USD being one of the main beneficiaries hitting an overnight high of 0.6945. This morning these levels are being tested as the New Zealand dollar opens at 0.6940.

SHAMEEM MUSA

US Dollar weaker on Trump worries


Australian Dollar

AUD / USD

Expected Range

0.7360 – 0.7500

The Australian dollar held onto Monday' gains throughout trade on Tuesday bouncing about a 40-point range. Softer than anticipated U.S housing data added to a string of weaker macroeconomic data sets casting doubt over the strength of the broader economy and a shadow over expectations surrounding monetary policy tightening. Investors’ concerns President Trump will be unable to deliver the economic stimulus promised throughout the election campaign continues to escalate as suggestions political noise will drown attempts for reform and possibly force the President from office before his term is through. The Aussie dollar held above 0.74 for much of the day touching intraday highs at 0.7437. With little direction derived from the RBA' minutes as the boards meeting account offered nothing not already addressed in previous rate statements. Attentions now turn to labour market data Thursday for direction and a possible upside extension.

Great British Pound

GBP / AUD

Expected Range

1.7300 – 1.7600

The Great British Pound is stronger again today when valued against its US counterpart reaching an overnight high of 1.2957. UK inflation figures yesterday came in better than expected printing a 2.7% yearly basis, above the 2.6% expected and previous 2.3%. Producer prices inflation was also higher than expected, with factory output prices up by 0.5%. Higher inflation usually means that the Bank of England would be a step closer to rising rates. However, all attention will still remain focused on Brexit. Today all eyes will be on the UK Unemployment Rate Decision with expectations the jobless rate will remain steady at 4.7 percent. The GBP/USD pair is currently trading at 1.2918. We now expect support to hold on moves approaching 1.2890 while any upward push will likely meet resistance around 1.2950.

Majors

USD, EUR, JPY

Expected Range

N/A

Having remained between levels of 1.0900 and 1.1000 intraday yesterday the Euro broke key resistance of 1.1000 against the US Dollar overnight to touch a fresh six-month high of 1.1097 . The Greenbacks decent began with German ZEW economic sentiment survey improved in May, suggesting optimism about the economic conditions in Q2 2017. Demand for the Euro continued as US Housing Starts fell by 2.5% in April, missing consensus expectations for a 0.2% lift and concerns about the Trump administration weighed on the Dollar. Meanwhile, USD/JPY continues to move south currently changing hands at a one-week low of 112.73 at the time of writing.

New Zealand Dollar

NZD / USD

Expected Range

0.6820 – 0.6950

The New Zealand Dollar held ground over the last 24 hours, trading in a tight 40 point range. Supported by renewed strength in Oil and commodity prices the Kiwi hit an intraday high of 0.6905. Overnight the latest Global Dairy Price Auction rose to 3.2% and was the fifth consecutive month of increases. Despite the rise, there was little movement in the NZD/USD cross as sideways movements were maintained. Domestically the market looks to price of goods release today as the New Zealand dollar opens this morning at 0.6885.

BY SHAMEEM MUSA

US Dollar Index edges lower


Australian Dollar

AUD / USD

Expected Range

0.7330 – 0.7440

Great British Pound

GBP / AUD

Expected Range

1.7300 – 1.7500

The Great British Pound is stronger today when valued against its US counterpart. After bottoming out near 1.2840 on Friday, the pound sterling managed to regain the 1.2900 handle reaching an overnight high of 1.2940. There were no macroeconomic releases in the UK yesterday. Today however attentions turn to multiple inflation figures for April, which if higher-than-expected, could result in a stronger Pound. The GBP/USD pair is currently trading at 1.2901. We now expect support to hold on moves approaching 1.2840 while any upward push will likely meet resistance around 1.2930.

Majors

USD, EUR, JPY

Expected Range

N/A

The U.S Dollar remained on the back foot yesterday as US Empire State Manufacturing Index fell six points to -1.0 in May. In the survey, the firms that did respond showed a drop in new orders which was under zero for the first time in several months at -4.4. On the employment front, indexes remained positive in both employment and hours worked pointing towards continued improvement in the labour market. The softer than expected print supported EUR/USD pushing the pair towards 1.0989 as well as the CME FedWatch Tool moving from an 80% to 70% probability of a June rate hike. Meanwhile in China, retails sales rose 10.7% for the year to April which was down from the previous months reading, industrial production was up by 6.5% but missed expectations for a 7.0% increase, suggesting momentum in economic growth eased slightly in April.

New Zealand Dollar

NZD / USD

Expected Range

0.6820 – 0.6950

Buoyed by an uptick in commodity prices the NZD edged higher through trade on Monday breaking briefly above the 0.69 handle to touch intraday highs at 0.6917. Having tested key technical supports at 0.6830 in the wake of the RBNZ decision to maintain its neutral monetary policy platform into the foreseeable future the Kiwi has found reasonable support turning higher as investors correct positions following softer than expected U.S Manufacturing data. With the NZD' yield advantage expected to narrow come next months fed meeting the NZD could test new 2017 lows with a break below 0.6810/30 opening the door to a deeper correction toward 0.6750. Attentions today turn to RBA meeting minutes and commodity prices for near term direction.

BY SHAMEEM MUSA

US Dollar Index lower on weaker-than-expected retail and CPI prints


Australian Dollar

AUD / USD

Expected Range

0.7330 – 0.7420

The Australian Dollar crept marginally higher through trade on Friday breaking briefly through 0.74 before edging lower into the close. Having touched fresh four month lows midweek, the AUD found support late Friday after U.S inflation and retails sales data fell short of market expectations and cast a shadow over speculation surrounding Federal Reserve monetary policy action. Having tested resistance at 0.7415 the AUD failed maintain gains with investors reluctant to push any upward rally in the face of broader bearish trends. As attentions this week turn to RBA minutes and labour market data a move back through 0.74 could signal a short term relief rally and push toward 0.7450/0.7480 while a soft print and dovish RBA board could force the Aussie through support at 0.7310, signalling a deeper correction and moves through 0.73 and 0.72.

Great British Pound

GBP / AUD

Expected Range

1.7360 - 1.7640

The Great British Pound opened this morning slightly weaker when valued against its US Counterpart with the pair retreating from a previous session high of 1.2892. Over the last two weeks the Pound Sterling has traded within a 160-point range with the Greenback, however that may all change this week as the UK macroeconomic calendar will be quite busy over the next few days. On Tuesday, will see the release of April CPI and PPI figures, monthly employment data on Wednesday, and rounding off the week Retail sales figures on Thursday. The GBP/USD pair is currently trading at 1.2886. We now expect support to hold on moves approaching 1.2840 while any upward push will likely meet resistance around 1.2930.

Majors

USD, EUR, JPY

Expected Range

N/A

The Greenback experienced a pullback across the board on Friday after weaker than expected CPI print and retails sales came in below consensus expectations. US CPI came in slightly weaker on the core measure, headline CPI inflation rose 0.2%, while core inflation rose a modest 0.1%. Retail sales lifted 0.4% in April, which missed consensus expectations of 0.6% increase. With US labour markets still strong, the softer-than-expected CPI prints from the past two-months are unlikely to deter the Fed from hiking rates. EUR/USD moved above 1.09 to an eventual high of 1.0934, USD/JPY pulled back from a two-month high with Yen benefiting from safe-haven flows and currently buying 113.30 Yen.

New Zealand Dollar

NZD / USD

Expected Range

0.6820 - 0.6950

The New Zealand Dollar was hit by a wave of selling pressure late last week as the RBNZ kept interest rates on hold at 1.75%. The monetary statement by a dovish RBNZ was the main catalyst for the drop as news of soft wage growth and expected weaker inflation did no favours to the NZD/USD cross. In a relatively light trading session on Friday, Business NZ Manufacturing Index dipped for the month of April, remaining though in expansion territory as construction remained strong in Christchurch and Auckland' strong housing market. Despite dipping to an 11- month low of 0.6820, the Kiwi was uplifted to 0.6870 by a round of weak inflation data and retail sales in the United States. This morning NZ Retail Sales figures for the quarter are released as the New Zealand Dollar opens this morning at 0.6860 against its US counterpart.

BY SHAMEEM MUSA

US Dollar Index lower on weaker-than-expected retail and CPI prints


Australian Dollar

AUD / USD

Expected Range

0.7330 – 0.7420

The Australian Dollar crept marginally higher through trade on Friday breaking briefly through 0.74 before edging lower into the close. Having touched fresh four month lows midweek, the AUD found support late Friday after U.S inflation and retails sales data fell short of market expectations and cast a shadow over speculation surrounding Federal Reserve monetary policy action. Having tested resistance at 0.7415 the AUD failed maintain gains with investors reluctant to push any upward rally in the face of broader bearish trends. As attentions this week turn to RBA minutes and labour market data a move back through 0.74 could signal a short term relief rally and push toward 0.7450/0.7480 while a soft print and dovish RBA board could force the Aussie through support at 0.7310, signalling a deeper correction and moves through 0.73 and 0.72.

Great British Pound

GBP / AUD

Expected Range

1.7360 - 1.7640

The Great British Pound opened this morning slightly weaker when valued against its US Counterpart with the pair retreating from a previous session high of 1.2892. Over the last two weeks the Pound Sterling has traded within a 160-point range with the Greenback, however that may all change this week as the UK macroeconomic calendar will be quite busy over the next few days. On Tuesday, will see the release of April CPI and PPI figures, monthly employment data on Wednesday, and rounding off the week Retail sales figures on Thursday. The GBP/USD pair is currently trading at 1.2886. We now expect support to hold on moves approaching 1.2840 while any upward push will likely meet resistance around 1.2930.

Majors

USD, EUR, JPY

Expected Range

N/A

The Greenback experienced a pullback across the board on Friday after weaker than expected CPI print and retails sales came in below consensus expectations. US CPI came in slightly weaker on the core measure, headline CPI inflation rose 0.2%, while core inflation rose a modest 0.1%. Retail sales lifted 0.4% in April, which missed consensus expectations of 0.6% increase. With US labour markets still strong, the softer-than-expected CPI prints from the past two-months are unlikely to deter the Fed from hiking rates. EUR/USD moved above 1.09 to an eventual high of 1.0934, USD/JPY pulled back from a two-month high with Yen benefiting from safe-haven flows and currently buying 113.30 Yen.

New Zealand Dollar

NZD / USD

Expected Range

0.6820 - 0.6950

The New Zealand Dollar was hit by a wave of selling pressure late last week as the RBNZ kept interest rates on hold at 1.75%. The monetary statement by a dovish RBNZ was the main catalyst for the drop as news of soft wage growth and expected weaker inflation did no favours to the NZD/USD cross. In a relatively light trading session on Friday, Business NZ Manufacturing Index dipped for the month of April, remaining though in expansion territory as construction remained strong in Christchurch and Auckland' strong housing market. Despite dipping to an 11- month low of 0.6820, the Kiwi was uplifted to 0.6870 by a round of weak inflation data and retail sales in the United States. This morning NZ Retail Sales figures for the quarter are released as the New Zealand Dollar opens this morning at 0.6860 against its US counterpart.

BY MATT RICHARDSON

Aussie holding on above support as attentions shift to US inflation data


Australian Dollar

AUD / USD

Expected Range

0.7330 – 0.7430

The Australian Dollar opened this morning little changed when valued against its US Counterpart with the pair retreating from an overnight high of 0.7382. The Aussie still unable to reach the 0.7400 level. There were no local data releases yesterday, and the macroeconomic calendar will remain empty again today, leaving the AUD/USD pair to take further direction from both the commodities and equities markets. The AUD/USD pair is currently trading at 0.7373. We now expect support to hold on moves approaching 0.7340 while any upward push will likely meet resistance around 0.7395. One Australian Dollar currently buys 67.86 Euro cents and 57.21 British pounds.

Great British Pound

GBP / AUD

Expected Range

1.7350 – 1.7650

The Great British Pound has moved lower overnight after trading in a tight range during the Asian session. Starting European trade just below 1.2950, the GBP/USD cross dropped to 1.2910 after disappointing manufacturing production figures for the month of March. The BoE kept benchmark interest rates at record lows of 0.25%, setting a mildly hawkish tone, though market participants are not pricing a rate rise till after Brexit in 2019. Furthermore, the Sterling was hit hardest as growth forecasts were trimmed for 2017 and only the one MPC member voted for an interest rate rise in a 7-1 vote to leave rates unchanged. The immediate reaction was a drop in the Pound as it fell through the 1.2900 handle and seeing an intraday low of 1.2850. The Sterling has recovered some of its losses overnight and opens this morning at 1.2890.

Majors

USD, EUR, JPY

Expected Range

N/A

The US dollar rally stalled through trade on Thursday as investors took stock and consolidated recent gains. Edging marginally lower against both the Japanese Yen and Euro investors paused amid concerns of further fall out regarding President Trumps’ sacking of FBI director James Comey and suggestions the greenback rally may have been over prescribed. Day-to-day macroeconomic markers have been widely variant throughout the last 8 weeks with a lacklustre performance through March overshadowed by an apparent rebound through April. The mixture of upbeat and soft economic performances, while far from derailing bullish sentiment, has forced investors to the sideline wary of extending gains ahead of the Fed June rate announcement. The dollar opens this morning having slipped back below 114 JPY while the Euro remains largely unchanged buying 1.0860 U.S. cents. Attentions now turn to a raft of key indicators with Inflation CPI and retail sales driving direction into the weekend.

New Zealand Dollar

NZD / USD

Expected Range

0.6720 – 0.6920

The New Zealand dollar suffered a heavy sell off through trade on Thursday following the RBNZ' rate announcement. Investors held a reasonable expectation the RBNZ may move toward a tighter monetary policy platform through the second half of 2017 and a shift away from its current neutral policy stance. Comments from RBNZ Governor Wheeler and a suggestion soft wage growth and sluggish inflation will extend the existing policy manifesto into the foreseeable future forces a sharp correction in NZD expectations. Touching near 12 month lows the NZD neared critical support points at 0.6830. Having edged marginally higher into the close the NZD currently buys 0.6845 U.S cents with attentions turned to key U.S macroeconomic indicators. A consolidated break below 0.6830 may open moves toward 0.6690/67.

BY MATT RICHARDSON

Aussie holding on above support as attentions shift to US inflation data


Australian Dollar

AUD / USD

Expected Range

0.7330 – 0.7430

The Australian Dollar opened this morning little changed when valued against its US Counterpart with the pair retreating from an overnight high of 0.7382. The Aussie still unable to reach the 0.7400 level. There were no local data releases yesterday, and the macroeconomic calendar will remain empty again today, leaving the AUD/USD pair to take further direction from both the commodities and equities markets. The AUD/USD pair is currently trading at 0.7373. We now expect support to hold on moves approaching 0.7340 while any upward push will likely meet resistance around 0.7395. One Australian Dollar currently buys 67.86 Euro cents and 57.21 British pounds.

Great British Pound

GBP / AUD

Expected Range

1.7350 – 1.7650

The Great British Pound has moved lower overnight after trading in a tight range during the Asian session. Starting European trade just below 1.2950, the GBP/USD cross dropped to 1.2910 after disappointing manufacturing production figures for the month of March. The BoE kept benchmark interest rates at record lows of 0.25%, setting a mildly hawkish tone, though market participants are not pricing a rate rise till after Brexit in 2019. Furthermore, the Sterling was hit hardest as growth forecasts were trimmed for 2017 and only the one MPC member voted for an interest rate rise in a 7-1 vote to leave rates unchanged. The immediate reaction was a drop in the Pound as it fell through the 1.2900 handle and seeing an intraday low of 1.2850. The Sterling has recovered some of its losses overnight and opens this morning at 1.2890.

Majors

USD, EUR, JPY

Expected Range

N/A

The US dollar rally stalled through trade on Thursday as investors took stock and consolidated recent gains. Edging marginally lower against both the Japanese Yen and Euro investors paused amid concerns of further fall out regarding President Trumps’ sacking of FBI director James Comey and suggestions the greenback rally may have been over prescribed. Day-to-day macroeconomic markers have been widely variant throughout the last 8 weeks with a lacklustre performance through March overshadowed by an apparent rebound through April. The mixture of upbeat and soft economic performances, while far from derailing bullish sentiment, has forced investors to the sideline wary of extending gains ahead of the Fed June rate announcement. The dollar opens this morning having slipped back below 114 JPY while the Euro remains largely unchanged buying 1.0860 U.S. cents. Attentions now turn to a raft of key indicators with Inflation CPI and retail sales driving direction into the weekend.

New Zealand Dollar

NZD / USD

Expected Range

0.6720 – 0.6920

The New Zealand dollar suffered a heavy sell off through trade on Thursday following the RBNZ' rate announcement. Investors held a reasonable expectation the RBNZ may move toward a tighter monetary policy platform through the second half of 2017 and a shift away from its current neutral policy stance. Comments from RBNZ Governor Wheeler and a suggestion soft wage growth and sluggish inflation will extend the existing policy manifesto into the foreseeable future forces a sharp correction in NZD expectations. Touching near 12 month lows the NZD neared critical support points at 0.6830. Having edged marginally higher into the close the NZD currently buys 0.6845 U.S cents with attentions turned to key U.S macroeconomic indicators. A consolidated break below 0.6830 may open moves toward 0.6690/67.

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