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AUD / USD
0.7480 - 0.7630
The Australian dollar continued to see large swings of volatility as the US dollar strengthened against the majority of its counterparts Friday evening. Peaking at 0.7630 at the end of the domestic session, the Aussie continued its downward path through weekly support levels to close at 0.7540. The market continues to digest what the new incoming Presidents potential pro-growth, and fiscal policies will mean for the global economy. In the short term the Australian dollar is taking the brunt of movements as a surge into US Yields continues to gain momentum. On the domestic front this week the RBA releases its monetary policy minutes on Tuesday and Employment figures on Thursday. The Reserve Bank of Australia kept its cash rate on hold at 1.5% on its annual Melbourne Cup Day meeting and we could see further rhetoric tomorrow of changes to a neutral stance in rate guidance going forward as growth and inflation remain largely unchanged. The Australian dollar opens this morning steady at 0.7540 against the US Dollar.
Great British Pound
GBP / AUD
1.6550 - 1.6750
The Great British Pound recorded its best fortnight in 8 years against the USD with investors' having turned their attention away from Brexit and focus shift towards the US presidential election. Since Donald Trump' victory the pound has been the best performer of any major currency. However, the pound' bullish run against the US dollar faded towards the end of Friday' European session. The pound still finished the week over half a cent higher rallying above 1.26 on Friday for the first time since October 6, despite the US Dollar' own strength. The main release for the Pound in the coming week is inflation data for the month of October, which is forecast to rise 1.1% (from 1.0% previously). On Wednesday, we have the release of the labour data which is expected to remain at 4.9 percent. The week rounds off with Retail Sales on Thursday. The Pound opens this morning steady at 1.2595 against the USD.
USD, EUR, JPY
The USD dollar continued its upward march throughout trade on Friday as investors jumped behind the world' base currency on expectations Donald Trump' win could fuel fiscally driven inflation and support Federal Reserve rate hikes. The dollar touched its highest level in 9 months when measured against a basket of currencies and enjoyed its best weekly advance in over a year nudging 107 JPY while the Euro fell through 1.0850 to intraday lows at 1.0831. Having absorbed the initial shock markets have turned to review Trump' policies and his promises for infrastructure and domestic growth. The Republican President Elect has promised to spend big, improving infrastructure across the country while generating a broader base of new jobs. Such policies are seen as driving growth and inflation allowing some analysts to amend their timeline of Fed monetary policy changes. Increasing expectations, the Fed will raise rates in December along with a shorter path to future rate hikes has fuelled demand for the USD and highlights the gap between major Central Bank policy platforms. Direction today will again be driven by demand for U.S treasury yields while ECB President Mario Draghi address to Italian treasury will be closely scrutinised for any sign as to how the bank will act in response to last week' shock.
New Zealand Dollar
NZD / USD
0.7040 - 0.7180
The New Zealand Dollar remained on the back foot for the latter part of last week after the Central Bank cut interest rates on Wednesday and the door remains open for further cuts. The NZD/USD continued to move lower on Friday from levels around 0.7200 after the US Consumer Sentiments figures increased to a 5-month high in November as investors remain optimistic around the US presidential elections last week and expectations that Trump policies will boost spending and inflation. The pair closed the New York Session around US 71c, down nearly 4% in the week, further downside risks are on the cards with Retail Sales expected to pull back from the previous quarter.
0.7530 - 0.7730
The Australian Dollar edged lower through trade on Friday as investors demand for USD denominated assets increased. Having edged higher and recouped losses throughout the domestic session the AUD fell sharply overnight moving back through 0.76 to touch intraday lows at 0.7573. Markets demand for US treasuries is driving direction and while the AUD has found support in renewed risk appetite and a move away from haven assets in the aftermath of the election Greenback gains are putting downward pressure on the commodity linked currency. A series of lower highs and lower lows suggest the AUD could be open to a larger downward correction and should the Aussie break key technical resistance levels at 0.7580 a move toward 0.75 is open. Attentions and direction today will again be driven by demand for treasuries and bonds.
1.6400 - 1.6580
The relief rally has well and truly remained in play over the past 24 hours with the Great British Pound comfortably breaking the 1.2500 mark when valued against its US Counterpart. Outperforming versus the majority of its counterparts the Sterling' push higher overnight was so strong previous resistance levels at 1.2360 are now being earmarked as fresh levels support. During a window absolutely dominated by the sentiment under-currents triggered by Donald' Trump victory on Wednesday perceptions have significantly changed during the trading sessions since with many experts voicing renewed faith that Trump could deliver some major sources of stimulus for the world' largest economy. Opening notably stronger versus the Greenback at a rate of 1.2558 the Sterling is also significantly stronger versus both the Australian dollar (1.6507) and the New Zealand dollar (1.7437).
The U.S dollar railed through trade on Thursday moving through three month highs against the Yen as markets adjust to what a Trump Presidency may mean for domestic growth and inflation. The Greenback moved through 106 to touch intraday highs at 106.94 before resistance and profit taking took hold, while the Euro fell through 1.09 to touch 1.0867. Trump' protectionist trade policies and infrastructure plans are expected to boost spending and fuel inflation bolstering demand for Treasury yields and consequently demand for the world' base currency. Yields on long dated bonds rose to their highest level in 10 months as traders and markets chase long term returns. With little headline data on hand direction will stem from yield plays and demand for treasury bonds. While the current demand for dollar denominated assets continues we expect the USD to test new highs against the Yen, while the Euro remains under further downward pressure.
0.7150 - 0.7250
Re-affirming the markets commonly held view, the RBNZ cut its official bank cash rate by 25 basis points yesterday to 1.75 percent. In a move which was broadly anticipated the consensus view now is that the most recent expansionary move represents the end of their current easing cycle. Trading between a low of 0.7176 and a high of 0.7307 over the past 24 hours, overall the Kiwi has remained under pressure when valued against its US Counterpart a plight not assisted given the US dollar has found some firmer footing. Opening notably weaker at a rate of 0.7194 versus the Greenback, investors in the near-term are likely to be keeping a close on Trump' transition as he looks to change his focus from campaigning to governing.
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.
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.
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.
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.
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