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AUD / USD
0.7580 – 0.7730
The Australian dollar tumbled through trade on Wednesday as markets responded to the shock election of Republican candidate Donald Trump. The mainstream media and wider financial markets had largely priced in a win for Democrat Hilary Clinton and as early polling suggested she may be the first woman to ascend the white house steps the AUD rallied to touch 0.7771. However, as key battleground states fell to Trump and Hilary lost what were previously consider safe democratic electorate markets dumped the Aussie in a flight to safety. The AUD lost almost 2 cents to touch intraday lows at 0.7585 before European and North American markets entered the fray and largely stabilised. Recovering from the shock that plagues Asian markets the Aussie recouped losses overnight moving back through 0.76 and opens this morning buying 0.7662 U.S cents. Attentions now shift to deciphering what exactly a Trump presidency will look like. His largely conciliatory victory speech went a long way to placating markets and seems to have had little impact on expectations for Fed policy into the end of the year. While the AUD remains range bound failing to break outside 4 month trading bands a strengthening USD could be the catalyst that pushes the AUD below recent supports at 0.7580 and 0.75.
Great British Pound
GBP / AUD
1.6080 – 1.6320
The Great British Pound opens this morning marginally higher having found early support as markets responded to the shock realisation republican Donald Trump will be the 45<sup>th</sup> President of the United States. Rallying through 1.25 to touch session highs at 1.2548 Sterling relinquished gains as European and North American markets failed to continue the panicked selling that plagues Asian markets and equities. Edging back lower cable then bounced about between 1.2375 and 1.2475 as analysts and investors absorb just what this means for global markets. Will Trump enact the protectionist trade policies that will largely damage and slowdown growth across the global economy and what does this mean for the Bank of England and domestic UK growth? With demand for U.S treasury yields driving markets direction today and little macroeconomic data on hand we will be watching for further USD gains as the immediate aftermath appears dollar positive.
USD, EUR, JPY
The U.S dollar closed higher Wednesday recouping early losses suffered throughout Asian trade. Buoyed by demand for U.S Treasury yields the Greenback touched fresh highs against the Yen recovering from intraday lows at 101.17 to touch session highs at 105.90. Trump' shock Presidential victory forced yields on Treasury notes and bonds to their highest levels in nine months as markets jumped behind expectations the President Elect will introduce trade barriers designed to promote domestic wages and boost inflation. With yields driving direction, support for the Dollar rose across the board forcing the Euro back through 1.10 to intraday lows at 1.0920 while support for a December Fed rate hike remains strong. CME' Fed Watch Tool and Fed Funds Futures show a strong expectation the Fed will raise rates before the year is out and as direction is governed by yield demands short term USD gains are a strong possibility as the market absorbs just what this election result means for U.S economy and wider global economy. Can Trump follow through and unite a divided America promoting domestic growth and riding this powerful shift away from globalisation.
New Zealand Dollar
NZD / USD
0.7260 – 0.7390
The New Zealand dollar moved lower through trade on Wednesday as markets responded to the shock election win for Republican candidate Donald Trump. Crashing through 0.73 throughout domestic and Asian trade the Kiwi was battered as markets fled to the safety of haven assets. Touching intraday lows at 0.7262 the Kiwi found support above the key technical averages and held onto throughout overnight trade as investors and markets absorbed exactly what a Trump led America could mean for the Global economy. US treasury yields surged and investors jumped behind the Greenback forcing a selloff in haven plays and adding some respite to the Kiwi collapse. Having opened buying 0.7294 U.S cents the NZD has rallied in response to the RBNZ decision to cut the bench mark cash rate from 2.00% to 1.75%. The move was largely anticipated and signs the RBNZ is in no hurry to ease rates further has forced the NZD back through 0.73 to 0.7340 at time of writing.
0.7320 - 0.7835
The Australian dollar having maintained a relatively tight range through much of the domestic session rallied in overnight trade bouncing through 0.7750 on expectations Hilary Clinton will be the 45<sup>th</sup> President of the United States. Despite the bitter and tight fought campaign markets have begun pricing in a Democratic victory facilitating a rally across commodity linked and emerging market currencies. Investors are unwinding risk plays moving away from haven assets picked up in the weeks leading up to the election when Clinton was the centre of an FBI probe into email security. With little of note on the macroeconomic docket and attentions squarely focused on the outcome of the U.S Presidential Election direction will fluctuate as key battleground States are won and loss. A Clinton win should mean a short term relief rally for the AUD testing 0.78 and possibly 0.80 U.S Cents in the immediate aftermath while a Trump triumph would prompt a swift and rapid reversal with supports at 0.7580 and 0.7500 likely to be broken as new 4 month lows are tested.
1.5650 - 1.6250
The Great British Pound offered little to excite investors through trade on Tuesday failing to make any significant directional shifts ahead of the U.S Presidential Election. Despite early rallies across commodity linked and emerging market currencies Sterling has remained relatively subdued struggling to make a substantial break from values around 1.2400. With attentions squarely focused on the outcome of the U.S Presidential Race cable fortunes and direction lies in the key battleground states. Should Clinton take the oval office we can expect a Greenback rally through the short and medium term as investors’ expectations for a December rate hike increase and the Gap between FOMC and BoE monetary policy widens.
The U.S Dollar edged higher through trade on Tuesday as markets and investors continued to back democratic nominee Hilary Clinton. Advancing against the traditional safes havens of the JPY and CHF the USD moved through 105 to touch session highs at 105.19 against the Yen while the Euro fell to one week lows touching 1.1010. Early projections suggest Clinton is polling strongly in a number of key battleground States which could see the former First Lady secure the 270 college votes required to take the White House. Seen as the candidate to maintain the status quo a Clinton win should prompt rallies across commodity, risk and emerging market currencies as investors move away from haven assets. However should Trump come from behind and steal victory corrections akin to June' Brexit shock could besiege the market forcing a rush to safety and short term collapse across emerging and commodity linked markets. The Canadian Dollar and Mexican Peso sit as key markers to wider markets as to the election outcome. Attentions today remain squarely on the Presidential Election with direction expected to ebb and flow throughout trade as numbers begin trickling through from 10:00Am AEDT.
0.7160 - 0.7570
Much like its antipodean counterpart the New Zealand dollar enjoyed a quiet domestic trading session maintaining a tight 30 point range before rallying overnight to break through 0.7350. The NZD advanced to touch intraday highs at 0.7392 as investors and markets prepare for a Democratic win. With the first numbers still to be reported financial markets are boldly calling for a Clinton run White House as analyst and markets move away from haven assets buying into the commodity linked and yield advantageous Kiwi. With direction today governed by the U.S democratic system we will be closely monitoring Key currency pairs as markers to wider sentiment.
0.7570 - 0.7830
The domestic docket offered little to excite investors throughout trade on Monday as AUD direction was governed by sentiment and speculation surrounding the U.S Presidential Election. An uptick in local job advertisements for the month of October, while suggesting moderate employment growth had little impact on the Australian Dollar. News of the FBI' conclusion that Hilary Clinton' did nothing incriminating bolstered demand for equities and commodities increasing investors risk appetite and pushing the Aussie through 0.77 U.S cents. With the cloud that hung over Clinton' campaign now lifted markets are beginning to confidently price in a Democratic win. On the eve of one of the closest fought Presidential Elections in recent history direction will continue to be governed by speculation surrounding its outcome. The AUD opens stronger this morning buying 0.7725 U.S cents and nearly 0.70 euro cents.
1.5980 - 1.6150
Failing to stretch its gains beyond an overnight high of 1.2497 when valued against its US Counterpart, the Great British Pounds most recent upward run ended following the announcement the FBI had closed its Clinton Investigation. On the data front yesterday British Halifax PMI posted a strong gain of 1.4 percent, a release which was well above forecast. Not sufficient enough to turn the tide, overall yesterday' session favoured the Greenback. In what' set to dominate flows today ahead of the impending election result, the Sterling still has one more major macro hurdle in its path, tonight' manufacturing read for the month of October. Opening lower versus the Greenback at a rate of 1.2405 the Sterling is weaker also versus both the Australian dollar (1.6072) and the New Zealand dollar (1.6919).
The U.S dollar rallied through trade on Monday buoyed by speculation Hilary Clinton will win a closely fought U.S Presidential Election. The FBI announced late Sunday that Clinton would not face criminal charges, confirming the democratic nominee had no case to answer following a deeper probe into emails found on her personal server. The Greenback rallied as risk appetite returned and markets began positioning themselves for a Clinton victory. Advancing back through 104 JPY the USD touched intraday highs at 104.63 while the Euro slumped back below 1.1050 and the USD dollar index moved up 0.75%. Markets appear confident the American public will opt to maintain the status quo as Trump' stance on immigration and foreign policy have alienated large portions of the electorate. On the eve of a presidential campaign plagued by controversy and vitriol direction will be governed by expectations surrounding the election outcome as investors position themselves ahead of this significant risk event.
0.7280 - 0.7360
The New Zealand dollar edged higher when valued against its US Counterpart in overnight trade with risk sentiment favouring the Kiwi after fresh polls showed Hillary Clinton had nudged ahead of her Republican candidate. Carrying through a rally which was initiated from Asia, stocks markets in both the United States and Europe also benefitted from the positive risk flows. In what would be broadly supportive of a stronger a NZD a Clinton victory over the next 24 hours remains the single most important driver for the currency with the RBNZ announcing its monetary policy on Thursday, amplifying the level of unease which currently hangs over markets. Opening steady versus the Greenback the New Zealand Dollar currently buys 73.30 US Cents.
0.7630 - 0.7730
The Australian Dollar traded sideways during Friday' local session after the Monetary Policy statement from the Reserve Bank of Australia said it is focused on the medium-term inflation target and sustainable growth in judging the cash rate stance at its November meeting. It suggests the RBA will not be looking to lower the official cash rate anytime soon. Also, Retail Sales jumped 0.6% easily beating forecast of 0.4%. In the overnight session, the release of US non-farm payrolls report came in slightly below expectations, however an improvement in average hourly earnings suggest wage growth could help a consumer driven inflationary push reinforcing calls for a rate hike in December. The AUD/USD tested 0.7690 but failed to break through. According to CME' Fed watch Tool there is a 66% probability there will be a hike in December. ANZ Job Ads this morning, however all attention will be on the US presidential election which kicks off tomorrow.
1.6125 - 1.6325
The Great British Pound finished the week higher against the Greenback on the back of the ongoing “Brexit” negotiations. Sterling reached highs of 1.2527 against the USD late last week after a British High Court sent a shock through UK markets as it ruled UK Prime Minister Theresa May must seek parliamentary approval to formally begin the process of taking the country out of the EU. The move throws the government' plans into disarray as the PM had previously said she would shortly invoke Article 50. The Government have appealed the decision and the Supreme Court is due to sit in December. Attentions now turn to a heavily laden week ahead with all eyes on the US election and any breaking news on Brexit. Sterling opens lower this morning and currently buys 1.2448 on news Clinton has been cleared by the FBI lifting the shroud that hung over her candidacy through the last week and a half.
The U.S dollar remained under pressure through trade on Friday as investors seek the safety of haven assets driving demand for the Swiss Franc and Japanese Yen. The Greenback touched near one month lows against the haven currencies as markets remain jittery ahead of Tuesdays U. S Presidential election. Analysts largely overlooked an uptick in wages and stable employment growth as markers supporting a December rate hike with attentions squarely focused on America' decision. The battle remains too close to call as several crucial electorates previously expected to be safe wins for Clinton are now poised on a knifes edge with Trump' aggressive campaign turning up the heat in the final days before voters hit the polling booths. With little macroeconomic data on hand to drive investors through Monday direction will be solely governed by expectations surrounding the election result. To that end we have seen a sharp rally away from haven assets at time of writing as confirmation the FBI has again cleared Clinton of any wrong doing lifting the cloud that has plagued her candidacy this last week and a half. We expect markets will continue to square positions leading into the vote as traders appear reluctant to extend bets ahead of this crucial risk event.
0.7220 - 0.7365
The New Zealand dollar offered little to excite investors through trade on Friday holding onto gains enjoyed throughout the week and refusing to dip back below the 0.73 U.S Cent handle. Having rallied strongly on the back of improved labour market conditions the Kiwi benefited from heightened investor nervousness in the face of a tight Presidential race. Markets remain reluctant in holding on to USD long bets as the possibility of a Trump victory on Tuesday remains so squarely on the table. Having touched intraday lows at 0.7310 Friday the NZD opens the week buying 0.7307 as traders attentions are drawn to any news that will affect the outcome of Tuesday' Presidential Election.
0.7580 - 0.7740
The Australian dollar edged higher throughout Thursday buoyed by an improved trade balance and wider USD weakness. The AUD rallied in early trade following a narrowing in the trade balance deficit touching 0.7680 before a squaring of USD positions following new polling that suggested democratic candidate Clinton regained a small lead forced a step sell off and sent the AUD toward intraday lows at 0.7640. The Aussie recouped losses as wider uncertainty and general market unease capped USD gains and the AUD touched intraday day highs at 0.7687. Having again met resistance on moves approaching 0.7690 /0.77 attentions now turn to the RBA' monetary policy statement and domestic retails sales numbers as markers for direction leading into U.S labour market data and next week' Presidential Election.
1.6050 - 1.6350
It has been a busy evening for the British Pound posting four week highs of 1.2495 overnight against its US Dollar counterpart. As anticipated the Bank of England left interest rates on hold at 0.25%. BOE now moves to a neutral stance with no further cuts expected in the near future. The Sterling started its rally against the US Dollar as the monetary policy committee revised their inflationary figures to 2.7% into 2017 and 2018 with the National Institution of economic and social research predicting this number could reach as high as 4% till 2021. Further fuel to the fire was the High court ruling meaning the government is unable to trigger article 50 of the Lisbon Treaty without Parliamentary consent. This caused a sharp 2% rally against the Euro to 1.1285 with hopes of a soft Brexit now slowly evaporating. The Great British Pound opens stronger against the board, currently trading at 1.2460 against the Greenback, the Australian dollar (1.6210) and Kiwi (1.6980)
The U.S Dollar remained subject to selling pressures throughout trade on Thursday as nervous investors waver in the face of election uncertainty. Having stabilised in early trade following polling that suggested Democratic Candidate Hilary Clinton was regaining her overall advantage the dollar failed to rebound beyond three week lows as markets prepare for the possibility of a Trump Presidency. The Greenback fell through 103 JPY to touch intraday lows at 102.58 while the Euro pared early losses holding onto the week' early advance through 1.11. There is certainly a shift in market sentiment forming as investors pile into haven assets or sit out altogether, wary of extending positions ahead of next week' critical risk event. Attentions today will remain heavily focused on last minute polling numbers as the race for the White House overshadows headline macroeconomic data sets. U.S non-farm payroll and labour market data will govern direction, however anything remotely near market estimates will likely have little impact ahead of the election next week.
0.7220 - 0.7360
The New Zealand Dollar has posted a near 3% gain vs the US Dollar this week mostly assisted by a weaker Greenback. Local data yesterday showed that the ANZ Commodity Price Index rose 0.7% in October which was its sixth straight monthly increase however with U.S election jitters dominating sentiment there was little to non-impact on the pair intraday. As the US session kicked off, US weekly unemployment claims rose 265k from a reading of 258k prior which pushed the Kiwi through technical resistance levels of 0.7300, if the USD remains weak we see no reason for the pair not to continue to rise.
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