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AUD / USD
0.7530 - 0.7650
Supportive of a stronger Australian dollar yesterday the ASX managed to snap a three-day losing streak with the prices of iron ore and gold driving the commodities-back unit higher. Trading through the 76 US Cents handle there remains a cautious overtone to markets this morning ahead of what promises to be a very busy 24 hour window. Whilst the majority of market economists aren’t expecting any change to the RBA' underlying cash rate, today' meeting kicks starts a raft of tier 1 macro flows through to the end of this week, flows which include a manufacturing read from China ahead of the RBA this afternoon. Opening marginally stronger at a rate of 0.7608 when valued against its US Counterpart, topside resistance can be spotted at 0.7625 followed by 0.7680.
Great British Pound
GBP / AUD
1.5950 - 1.6110
The markets were fairly quiet in the Asian session yesterday as the Great British Pound opened at 1.2175 before drifting to a low of 1.2147 in overnight trading. While the market continues to focus on the US Presidential elections and continued Brexit woes, the Cable bolted out of the gates to a high of 1.2250 with rampant speculation that Bank of England Governor Mark Carney may not serve his full term into 2021. Carney advised he will be staying on an extra year after his initial term comes to an end in 2018 and will stay until June 2019 to ensure he oversees a clear path into a new era, post Brexit negotiations. The all-important policy meeting this Thursday have been overshadowed as markets now price in a minimal chance of any interest rate movements this month. Attention turns to the release of UK Manufacturing PMI data this morning as the Sterling opens stronger across the board versus Greenback (1.2240), Aussie (1.6085), and the Kiwi (1.7120)
USD, EUR, JPY
The fallout from FBI probes into Democratic Nominee Hilary Clinton continued to weigh on the U.S Dollar through trade on Monday forcing the Greenback lower against a raft of major currency counterparts. Investors’ concerns escalated as the most recent FBI investigations effect polling and suggest a considerable narrowing in the race for the White House. With Donald Trump closing the gap there is increasing concerns within financial sectors as to what a Republican victory would mean for domestic and international fiscal stability. The U.S dollar edged lower against the Euro, JPY and Swiss Franc as the dollar index was largely flat throughout Monday. With attentions squarely focused on any commentary affecting the Presidential race markets look to today' BoJ Monetary policy statement and Wednesday' FOMC rate announcement for direction ahead of next week' vote.
New Zealand Dollar
NZD / USD
0.7080 - 0.7190
ANZ published its monthly business confidence survey yesterday which reported that businesses in New Zealand were less upbeat than they were in September, the report created an immediate sell-off putting pressure on the New Zealand Dollar intraday falling from 0.7164 down to 0.7135 vs the US Dollar. The drop was capped with a 15 pip range holding for the remainder of the day and throughout the European and US session with markets remaining cautious until the uncertainty goes away around the US election. High impact data releases today with both Japanese and Australian central banks due to announce their interest rate decision – both expected to hold. The Kiwi is slightly lower against the Australian Dollar at 0.9393 and unchanged against the Euro buying 0.6509.
0.7530 - 0.7630
The Australian Dollar failed to recoup losses suffered into the close on Friday struggling to break back above 0.76 U.S Cents. Having broken below supports at 0.7590 the AUD touched intraday lows at 0.7569 leaving the door open for a shift in bullish sentiment and a run towards 0.7530. The Aussie struggled to benefit from wider Greenback weakness as investors appear reluctant to extend gains ahead of this weeks all important RBA and FOMC policy meetings. The Australian dollar has laboured when trying to break beyond a 3 cent range and has bounced between 0.75 and 0.78 in 4 months since June, however with expectations surrounding a U.S rate hike continually increasing the AUD is vulnerable to externally driven bouts of volatility. Attentions today turn to the Fed' preferred inflation measure the PCE price index ahead of Tomorrow' RBA policy meeting and Wednesday FOMC rate review.
1.5920 - 1.6220
The Great British Pound continued to trade in a narrow band last week of 1.2114 – 1.2271 against the US Dollar as stronger than expected GDP figures showed the economy grew by 0.5% for the third quarter. Given a positive GDP figure this puts thoughts into a delay on further monetary policy easing at Thursday' interest rate meeting. Bank of England governor Mark Carney indicated last week that the “inflationary impact” of the currency slump “Could encourage him to vote against any further interest rate cuts”. The cable sitting at three-decade lows could test crucial support of 1.20 this week as analysts predict a downward spiral for the British economy into the end of 2016. The Pound looks for direction early this week with important Manufacturing figures on Tuesday and opens at 1.2175. Currently swapping hands against the Australian Dollar (1.6037) along with the New Zealand dollar (1.7023)
The U.S Dollar edged lower against a pool of major currency counterparts on Friday on suggestions the FBI would continue to review emails sent by Democratic Nominee Hilary Clinton. The report puts a dent in Clinton' campaign and creates wider uncertainty in the race for the Whitehouse. With Clinton seen as the steady choice for the Presidency the surge in support for Trump raises questions as to the stability of the domestic economy, international trade and foreign political relationships. Political uncertainly largely overshadowed a strong gain in third quarter GDP numbers and the Greenback tumbled against the Euro and JPY giving up recent gains as the 19 nation combined unit touched 1.0991 while the USD moved back through 104.50 JPY. With the Election now just a little over a week away attentions will be closely tuned to any commentary or rhetoric that may influence the electoral outcome. Attentions today turn to US Core PCE price Index, the Fed' preferred measure of inflation. A strong print would back Friday' GDP growth and lend markets to increase bets the FOMC and Federal Reserve will raise rates in December.
Friday was quiet on the data front with no local economic releases for the New Zealand Dollar to look towards for direction and therefore offshore events were the main focus. It was all over the news that the US Federal Bureau of Investigation would be re-opening the case of Hilary Clinton' use of her private email server, the Greenback took a hit on the back of this advancing the Kiwi from lows of 0.7108 touching a high of 0.7166. Currently changing hands at 0.9410 against the AUD and 0.6504 against the Euro. Focus this week will be labour market data due on Wednesday that will show whether any wage inflation is developing.
0.7505 - 0.7650
The Australian dollar moved lower through trade on Thursday testing key technical supports and touching intraday lows at 0.7582. The Aussie suffered at the hands of an appreciating Greenback as investors continue to increase expectations surrounding a December Federal Reserve interest rate hike. CME’s fed watch tool suggest 78.5% of analysts are pricing in a shift in Monetary Policy prompting a surge in demand for Treasury yields. The market is now looking to the Fed to raise rates and we may be seeing a shift in sentiment towards the AUD as cracks appear in its resilience. Yesterday’s drop below 0.7590 could signal the beginnings of a bearish turn however while the Aussie holds above 0.75 there is still scope for upside rallies. Attentions today turn to 3<sup>rd</sup> quarter U.S GDP numbers ahead of next week’s key RBA and FOMC policy meetings.
1.5950 - 1.6100
The Great British Pound once again dipped below the 1.2200 mark when valued against its US Counterpart yesterday despite a preliminary read of economic growth which managed to surprise market participants. Having earlier traded as high as 1.2271 the GBPUSD pair lost momentum following the release after GDP expanded by 0.5 percent during Q3 a number above the 0.3 percent gain which was forecast. Whilst appearing to have dodged any near-term economic damage in the aftermath of Britain’s decision to leave the European Union, markets will still be eager to digest next week’s policy decision by the Bank of England. Opening weaker versus the Greenback a rate of 1.2162 the Sterling is steady versus the Australian dollar (1.6022) whilst lower versus the New Zealand dollar (1.7077).
The US Dollar remained strong against most major currencies in the last 24 hour period as a mix of data from the US managed to provide support for the Greenback. EUR/USD was still hovering around the 1.0900 handle as US Durable goods orders fell for the month of September along with Core capital goods orders, on the whole the September report shows a modestly weaker than expected equipment investment by businesses in the USA. On a positive note, a report showing the number of Americans filing for unemployment claims fell by 3,000 to 258,000 which indicates continuing labour market strength as these numbers have been under the 300,000 mark for over a year now. Meanwhile, the Dollar was near three-month highs against the Yen touching 105.35, a wait and see approach if the pair can hold on to these gains as the spotlight will be on The Bank of Japan next week as the central banks holds a policy meeting.
0.7080 - 0.7160
Unable to keep pace with a stronger Greenback overnight the New Zealand dollar has fallen when valued against the worlds reserve currency. With yields on 10-year treasuries rising to as high as 1.87 percent, overall it has been a choppy session for global markets with earnings reports in the United States taking the steam out of any potential upside moves. Ahead of a US GDP print this evening, the New Zealand dollar remains on track to finish the week in familiar territory as it currently trades 0.3 percent below its Monday open. Marginally lower the New Zealand dollar currently buys 71.20 US Cents
0.7530 - 0.7710
The Australian dollar enjoyed mixed fortunes throughout the global session on Wednesday enjoying strong gains domestically before suffering a downward correction throughout early European trade. The AUD was bolstered by a stronger than anticipated third quarter CPI inflation print rallying through 0.77 to touch intraday highs at 0.7708. The strong read came on the back of increases in the price of fruits and vegetables as adverse weather conditions disrupted supply chains. While we anticipate the RBA will now leave rates on hold next week the temporary catalyst to higher prices could force the board to adopt a somewhat more dovish tone than would have been expected if price gains had been driven by wider economic strength. The Aussie relinquished all gains enjoyed throughout the domestic session moving back through 0.7650 to touch intraday lows at 0.7638. Attentions now turn to U.S GDP growth Friday ahead of key Central Bank announcements as both the RBA and Federal Reserve set to proffer monetary policy statements throughout next week. With the Australian dollar range bound and struggling to break outside a 0.7590 – 0.7730 bracket analysts will be keenly attuned to any signal that suggest a breakout and move away from this current bullish trend line is looming.
1.5930 - 1.6070
The Great British Pound has found some upside when valued against its US Counterpart over the past 24 hours, trading as high as 1.2249 versus the Greenback. Whilst the intraday bias remains somewhat neutral, it has been a period of consolidation for the Sterling this week with the broader picture still remaining weak ahead of key resistance levels which have been earmarked closer to the 1.2450 mark. In the absence of any domestic flows overnight investors have already started to gear towards this evening’s preliminary GDP release where it’s expected Britain’s economy had expanded by 0.3 percent during the third quarter of this year. Notching up some solid gains across the board the Sterling is higher versus Greenback (1.2243), the Aussie (1.6002) and the Kiwi (1.7109).
The US Dollar fell against a basket of currencies on Wednesday as uncertainty around the U.S presidential election in the coming weeks and the Federal Reserve raising interest rates in December have resurfaced. The Euro Dollar rallied above 1.09 touching a high of 1.0945 offshore aided by a stronger German October IFO business climate indicator which in summary showed a positive picture of the German economy in the beginning of Q4 16. The Japanese Yen was mostly unchanged against the Greenback and the pair trades just above 104.50 handle. Key releases today US Core Durable Goods Orders which are expected to increase by 0.2% and US Unemployment claims expected to increase slightly.
0.7080 - 0.7200
The New Zealand dollar fell against the Australian Dollar in early trade following the release of Australia’s third quarter consumer price index report. While the headline consumer price index rose 0.7 per cent last quarter, beating market expectations of a 0.5 per cent rate, the New Zealand Dollar recouped early losses after closer analysis showed price pressures were driven by a temporary uptick in fruit and vegetable prices. All eyes today will be on the release of the Trade Balance data with expectations the deficit will reduce from -2.265M to -1.125M. The New Zealand Dollar was little changed against the Greenback throughout trade Wednesday struggling to break outside a 40-point trading bracket and currently changes hands at 0.7151.
0.7530 - 0.7690
The Australian dollar edged higher through trade on Tuesday bouncing off supports at 0.7590 as investors adjusted USD holdings on shifting European stimulus expectations. The Aussie benefitted as the Greenback moved off 8 month highs after Bank of England Governor Mark Carney doused suggestions the BoE would lend itself to further easing so soon after its previous rate cut. The comments dampened expectations for an extension in ECB quantitative easing and narrows the perceived gap forming between U.S and European Central Bank monetary policy platforms. The AUD rallied to touch intraday highs at 0.7655 however investors weren’t prepared to extend gains ahead of today’s all important 3<sup style="font-weight: lighter;">rd</sup> quarter CPI print. Today’s read has proved a sticky point for currency analyst through the week thus far as a strong read could bolster the near term AUD/USD fortunes, diminishing demand for additional RBA rate cuts and all but guaranteeing interest rate stability through the end of the year. With the Aussie poised to break outside recent ranges we watch support and resistance at 0.7590 and 0.7760 as markers signalling a possible directional swing.
1.5850 - 1.6000
The US Dollar rallied against the Sterling overnight as comments from Bank of England Governor Mark Carney that the recent movements by the Pound would be considered at its next rate setting due to be held on Thursday 3 November. The comments were viewed by the market that interest rates will remain on hold for the foreseeable barring any catastrophic in the markets. The Pound dipped by the 1.22 marked and has remain below this handle for last 12 hours. Tomorrows release of preliminary GDP should also see some volatility in the next day or so. Against the AUD the pound is changing hands at 1.5949 and 1.7015 against the New Zealand Dollar.
Continuing expectations that the US Federal Reserve will raise interest rates in the coming months has advanced the US Dollar against most major currencies, Dollar/Yen hit a high of 104.88, the highest we have seen since the end-of-July. On Monday, Chicago Fed President Charles Evans said the Fed could raise rates three times between now and the end of the year as long as the inflation outlook and labour market remain on track. A move does seems unlikely ahead of the US presidential election with investors pricing in a 71% chance of a hike in December. The Euro remained on the back foot with little reaction to data showing German business confidence hit a two-year high, it seems that any initial concerns over the UK’s decision to the leave the European Union are fading even more. The Euro fell to a low of 1.0852 but managed to recoup all losses to closing a shade under 1.09. Focus now turns today to key data releases starting with Australia’s CPI followed by German Import Prices.
In yesterday’s day of trading, the New Zealand Dollar traded lower against the Australian Dollar on the back of higher iron ore prices which bolstered demand for the Aussie ahead of Australian inflation data today. The NZD/AUD slipped to a 24-hour low of 0.9344 from 0.9381 yesterday, extending its decline for a third day. The Greenback was initially stronger against the New Zealand Dollar in early trade but gave back most of those gains. As a result, the Kiwi was little changed, currently trading at 0.7162 US cents from 0.7148 cents yesterday.
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