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AUD / USD
0.7825 – 0.8000
The Australian dollar offered little through trade on Monday edging marginally lower as escalating geopolitical tensions drove investors to safe haven assets. North Korea' hydrogen bomb test and intelligence that suggests it is preparing to launch an intercontinental ballistic missile have sparked a strong response from global leaders with Trump issuing fresh sanctions not just against North Korea but their trading partners. The move saw investors looked to the JPY and CHF in haven plays yet did little to seriously undermine AUD strength. Speculative long positions are now at their highest level in four years ahead of a key domestic backdrop. Attentions turn today to the RBA and a monetary policy update from which we anticipate little activity. The RBA is expected to maintain its current policy stance with a hike not priced in until at least Q2 2018. As such direction will derive from any commentary that accompanies the statement however recent rhetoric suggests Governor Lowe will continue to offer a neutral bias with little price action expected in response. We will watch ranges between 0.7880 and 0.8000 through trade today.
Great British Pound
GBP / AUD
1.6160 – 1.6370
USD, EUR, JPY
As the United States observed Labour Day and the financial markets remains closed in North America it was mostly a quiet day for the EUR/USD which moved very little touching a high of 1.1922 and a low of 1.1878. On the release front, Eurozone Sentix Investor Confidence rose from 27.7 in August to 28.2 in September. The outcome for September remains close to a decade high. Eurozone PPI continues to improve, coming in flat for July, after falling in June by 0.2%. The fall in June is now bigger than originally reported. In the year to July, producer prices growth eased from 2.4% in June to 2.0% in July. In other news the USD/JPY moved lower to 109.38 on geopolitical tensions following a successful test of a hydrogen bomb by North Korea on Sunday, the news has prompted the U.S to warn of military response posing any threat to them or their allies.
New Zealand Dollar
NZD / USD
0.7130 – 0.7275
The New Zealand dollar edged marginally higher through trade on Monday creeping back above 0.7150 but struggling to mount a consolidated extension through resistance at 0.7180/90. With local trade dominate by waning risk appetite in the wake of North Korea' hydrogen bomb test the Kiwi struggled to make serious gains and appears placed to enter a lower trading band. With little of note on the domestic docket today geopolitical tensions will continue to drive direction ahead of tomorrow global dairy trade Index update.
0.7825 – 0.8025
The Australian dollar rallied into the close on Friday buoyed by ongoing strength in commodity prices and underwhelming U.S labour market data. U.S non-farm payroll numbers printed well below expectations and saw the AUD test intraday highs nearing 0.80 U.S cents before investors reviewed the softer print in context. Historically August has been a poor month for strong employment growth and after a sustained period of labour market strength analysts doubted the read will do much to derail the Federal Reserve' path to normalisation. Moving lower into the close the Aussie finished the week buying 0.7975 and opens this morning at 0.7961. Attentions now turn to Tuesday' RBA rate announcements and Thursdays retail sales print for direction through the week ahead.
1.6160 – 1.6380
Despite a weaker-than-expected US nonfarm payrolls report the Euro struggled to mount any significant directional momentum through trade on Friday against the Greenback moving between a low of 1.1843 and a high of 1.1919. Data released showed that the U.S economy created 156,000 jobs in the month of August missing expectations of 180,000, the unemployment rate ticked up to 4.4% from 4.3%. A key piece of data the Federal Reserve monitors for evidence of continuing strength in the labour market is wages growth which for the year to August held at 2.5%. meanwhile in Japan, capital spending rose by 1.5% in Q2, well under consensus expectations for a rise of 7.9%, the small rise was despite a weaker yen and firmer overseas demand. The USD/JPY pair is currency changing hands at 109.80
0.7100 – 0.7275
The New Zealand dollar failed to follow its commodity counterparts higher through trade on Friday struggling to take advantage of softness in U.S labour market data. Having slipped below technical supports at 0.7190 the Kiwi touched intraday lows at 0.7126 and looks set to test support at 0.71. With support now resistance at 0.7190 attentions turn to offshore data sets this week as the domestic macroeconomic docket remains relatively light on and the kiwi will be at the mercy of off shore directional drivers.
0.7880 – 0.8000
The Australian Dollar is stronger this morning when valued against the Greenback. During yesterday' Asian session the Aussie fell to an intraday low of 0.7871. Overnight during the US session the Aussie recovered some of its earlier losses on the back of weak US inflation and housing data, reaching an overnight high of 0.7950. The AUD/USD pair has a major resistance at 0.7965. Looking ahead today on the local data front AIG Manufacturing Index (PMI) for August will be released at 9.30am AEST followed by CoreLogic' monthly House Price Index, also for August at 10.00am AEST. In the US tonight all eyes will be on the release of US non-farm payrolls for the month of August with market expectations of an increase in payrolls of 180,000, leaving the unemployment rate steady at 4.3%.
1.6100 – 1.6400
The U.S Dollar edged broadly lower through trade on Thursday following a dearth of lacklustre macroeconomic data. Attentions were acutely turned to the Fed' preferred inflation measure, the PCE index, and an uninspiring print dampened expectations of a revival in price pressures and heightened likelihood of a December rate hike. The poor read when coupled with softer than anticipated consumer spending and pending home sales forced the worlds base currency lower when values against most G10 counterparts. Falling below 110 JPY the USD gave up 1.19 against the Euro and saw the 19 nation combined unit claim intraday highs at 1.1925 following a small uptick in year on year inflation. As attentions shift to this evening' non-farm payroll numbers for direction into the weekend investors will be looking ahead to next week' ECB policy meeting with expectations for updated guidance and a planned approach to QE tapering firmly in their sights.
0.7080 – 0.7280
The New Zealand Dollar is weaker across the board after the ANZ business outlook survey showed weaker inflation indicators. The NZD/USD fell to a 24-hour low of 0.7131 after the announcement. The Kiwi dollar has seen a steadily fall this month, and it is on track to end about 4.5 per cent down in August against the USD. Fairly quiet on the data front today with the only release of quarterly Overseas Trade Index. The New Zealand dollar is notably weaker versus when valued against both the Euro at a rate of 0.6026 and the Australian dollar 1.1062.
0.7850 – 0.7970
The Australian dollar enjoyed mixed fortunes through trade on Wednesday rallying throughout domestic trade before profit taking and upbeat U.S macroeconomic data enabled a correction and reversal of local gains. The AUD found support early following stronger than anticipated Q2 construction; the strong read acts as a positive precursor to next week' GDP print and hints, possibly, at an uptick in employment and consumer spending. Touching intraday highs at 0.7997 the AUD then met selling pressures as investors took profit and forced the unit gradually lower. Moving back through 0.7950 upbeat U.S preliminary GDP and employment data helped fuel a Greenback rally as investors unwind short positions; touching intraday lows at 0.7893 the AUD opens this morning buying 0.79 U.S cents as attentions turn domestic Private Capital Expenditures and a key U.S inflation print for direction into Non-farm payroll numbers Friday.
US equity markets rose for a fourth consecutive day whilst the world' reserve currency continued its rebound from levels not witnessed in more than two years. In what was mainly data lead story overnight, optimism which surrounds the growth trajectory of the US economy was bolstered following the release of a second-quarter GDP print which showed growth had accelerated at its fastest pace in two years, momentum supported mainly by stronger than expected household spending and gains in business investment. Rallying by 0.4 percent, the Greenback has outperformed across the board over the past 24 hours with the Euro subsequently losing 0.7 percent. Whilst the euro opens lower this morning at a rate of 1.1890, in what' likely to remain a common theme towards the backend of this week, US non-farm payrolls on Friday will again be looked towards as a key driver of US dollar price activity.
0.7150 – 0.7250
The New Zealand dollar shifted gradually lower throughout trade on Wednesday relinquishing early gains and moving back below 0.72 U.S cents. Commentary from RBNZ Governor Graeme Wheeler placed early pressure on the local unit as the central bank figurehead suggested a “lower NZD was needed”. While such sentiment did not surprise markets, when coupled with stronger than anticipated US ADP non-farm payroll data and preliminary GDP numbers the Kiwi was forced to intraday lows at 0.7190. Having maintained wider ranges between 0.7190 and 0.73 throughout the past fortnight a move below this point of key technical support could signal a wider correction and deeper reversal back toward 0.70 and 0.69. Attentions now turn to domestic business confidence and key U.S inflation data for direction through trade on Thursday.
0.7900 – 0.8000
The Australian Dollar is stronger this morning when valued against the Greenback. The Aussie reached an overnight high of 0.7983. Yesterday we saw the release of monthly New Home Sales data for July. Australian new home sales tumbled to a four-year low in July, driven by a 15.7 per cent decline in apartment sales. While sales of detached housing fell by 0.4 per cent. Looking ahead today Australia will release monthly Building Approvals and Quarterly Construction Work Data for July. The AUD/USD pair is currently trading at 0.7952. We now expect support to hold on moves approaching 0.7930 while any upward push will likely meet resistance around 0.7990.
Markets were sent into turmoil yesterday morning after news broke of a missile fired by North Korea which flew over Japan. As expected there were large movements into safe haven currencies such as the Swiss Franc and Japanese Yen while waiting for confirmation on further news from the UN Security Council. USD/JPY recovered from three year lows overnight of 1.0830 after a flight initially into the Japanese Yen, finishing the day at 1.0960. Recoveries were seen overnight as the Euro surged above 1.20 for the first time since January 2015 and hit an intraday high of 1.2070, helped by a solid German GfK consumer climate reading and French consumer spending results overnight. Momentum was stalled, eventually pulling back to 1.1970 against the greenback in the North American session, helped by a solid increase in United States CB Consumer Confidence levels. Key events to watch overnight will be the release of the latest ADP Non-Farm Employment figures along with Prelim GDP for the 2nd quarter of 2017 in the United States.
0.7200 – 0.7300
The New Zealand Dollar seesawed against the Greenback during yesterday' session, having initially dropped 40 pips in early morning trade to a low of 0.7218 as news broke of missiles being fired by North Korea over Japanese airspace. The pair clawed back losses and with 73c in sight the Kiwi rallied to a high of 0.7298 on the back of broad based USD weakness. On the data front today sees the release of low tier data Building Consents, we can expect to see immediate resistance around the 0.7300 level with support sitting at 0.7220.
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