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By MATT RICHARDSON

Greenback enjoys only measured gains despite hawkish FOMC


Australian Dollar

AUD / USD

Expected Range

0.7980 – 0.8080

The Australian Dollar ascended against the Greenback yesterday as government yields hit their highest level since 2015 which gave support to the local unit. Pre FOMC announcement, AUD/USD hit a high of 0.8100 but soon pulled back falling almost a cent back under 0.8000 following the Fed release. As widely expected the Fed held the target rate steady at 1.00-1.25% and also announced the beginning of balance sheet normalisation next month after almost ten years of the onset of the global financial crisis. Markets are led to believe there will be three rate hikes in 2018 and perhaps one in December of this year. Aussie currently buying 0.8030 when valued against its US counterpart. Later today sees the RBA Governor Lowe speak in Perth on a speech titled ‘The Next Chapter’ to the American Chamber of Commerce.

Great British Pound

GBP / AUD

Expected Range

1.6625 – 1.6925

Majors

USD, EUR, JPY

Expected Range

N/A

New Zealand Dollar

NZD / USD

Expected Range

0.7275 – 0.7425

The New Zealand Dollar is slightly stronger against the Greenback after the Federal Reserve on Wednesday said it would embark next month on its biggest policy shift since 2015. The central bank confirmed that it would start trimming the $US4.5 trillion balance sheet it built up. On the release of the FOMC statement the Kiwi spiked to a six week high of 0.7433. Looking ahead locally today and all attentions turn to the release of Gross Domestic Product for the second quarter which is expected to rise 0.8%, taking the year on year pace to 2.5%. The NZD/USD pair is currently trading at 0.7352. We now expect support to hold on moves approaching 0.7340 while any upward push will likely meet resistance around 0.7400.

By MATT RICHARDSON

All eyes on FOMC


Australian Dollar

AUD / USD

Expected Range

0.7880 – 0.8090

The Australian Dollar has climbed back through Tuesdays day of trading against the Greenback buying above the 80c handle, overnight it touched a high of 0.8020. The minutes from the latest Reserve Bank policy meeting showed that the bank is more positive about the domestic outlook and are upbeat on the labour market. Despite this the notes of caution still remain with the RBA and they are unlikely to look at raining rates anytime soon. In other news, House Price Index came in at 1.9% in the June quarter vs an expected 1.2% gain which was the likely driver behind the Aussie push towards 80c. RBA assistant governor is due to speak today at a the Australian Business Economists Lunchtime Briefing in Sydney but markets will be keenly attuned to the Fed which is due to announce plans to begin unwinding it' $4.5 trillion balance sheet.

Great British Pound

GBP / AUD

Expected Range

1.6650 – 1.7050

Majors

USD, EUR, JPY

Expected Range

N/A

New Zealand Dollar

NZD / USD

Expected Range

0.7190 – 0.7390

The New Zealand dollar is stronger this morning when valued against the Greenback. The Kiwi reached an overnight high of 0.7326. Over the last few weeks the NZD/USD currency pair has ranged between 0.7200 and 0.7350, capped by election uncertainty, and by the downward trend in the Greenback. Looking ahead this week and traders are now preparing for the release of the quarterly GDP report on Thursday and the country's general election on Saturday. The NZD/USD pair is currently trading at 0.7314. We now expect support to hold on moves approaching 0.7240 while any upward push will likely meet resistance around 0.7329.

By JOEL HOLMES

U.S. Dollar higher in anticipation for Fed Meeting


Australian Dollar

AUD / USD

Expected Range

0.7900 – 0.8000

The Australian Dollar fell 40 basis points during the American session to post a fresh 2-week low. During the Asian session, the pair tested the 0.8030 resistance level before ultimately turning to the downside. Opening this morning at 0.7960, the Aussie was hit on multiple fronts with mixed Chinese money data weighing on the Australian Dollar. The bearish outlook was further exacerbated by the sharp decline in the Canadian dollar, triggering a further sell-off in both commodity currencies. With the ‘Quantitative Tightening’ announcement widely expected to be released this Thursday, policy makers and indeed traders are positioning themselves for a world with higher borrowing costs, strengthening the outlook of the Greenback and in turn weighing on its counterpart the Aussie. With a quiet day on the domestic economic calendar, investors are treading water ahead of an action-packed Thursday.

Great British Pound

GBP / AUD

Expected Range

1.6900 – 1.7100

Majors

USD, EUR, JPY

Expected Range

N/A

New Zealand Dollar

NZD / USD

Expected Range

0.7200 – 0.7300

The New Zealand dollar is weaker this morning when valued against the Greenback. The Kiwi reached an overnight high of 0.7343 before falling 0.5% for the day to 0.7250, almost a full cent off its high. The USD strength came as the market now expects the Federal Reserve to announce on Thursday the beginning of “quantitative tightening”, with its balance sheet expected to begin shrinking from next month, as the Federal Reserve keeps its options open for a possible interest rate hike later this year in December. Westpac Consumer Sentiment was released this morning which softened to a level of 112.4 in September, down from 113.4 last quarter. The NZD/USD pair is currently trading at 0.7259. We now expect support to hold on moves approaching 0.7240 while any upward push will likely meet resistance around 0.7329.

By BRETT OTTAWA

Rate hike warning sees Sterling bounce to 12 month highs


Australian Dollar

AUD / USD

Expected Range

0.7950 – 0.8050

The Australian dollar enjoyed mixed fortunes through trade on Thursday as investors toyed with moves back through 0.80 US Cents. The currency rebounded early following stronger than expected labour market data, where in, 54,000 new jobs were added amid strong growth in full time employment and participation rates. The Aussie bounced through 0.80 and touched intraday highs at 0.8016 before softer than anticipated Chinese macroeconomic data sets curb upward momentum and investors squared positions leading into an all-important US inflation print. A steady read in core inflation and an uptick in wider consumer prices bolstered the USD and sent the Aussie back below the psychological 0.80 handle to touch intraday lows at 0.7960. Having corrected upward into the open the Aussie now buys 0.7997 US cents as attentions turn to a raft of US activity indicators headlined by Retail Sales. Watch support on moves toward 0.7960 and profit taking on moves through 0.8010.

Great British Pound

GBP / AUD

Expected Range

1.6700 – 1.6800

Majors

USD, EUR, JPY

Expected Range

N/A

New Zealand Dollar

NZD / USD

Expected Range

0.7200 – 0.7300

The New Zealand Dollar saw a drop of sixty basis points from its high over the past twenty-four hours as an increase in the United States inflation reading sent the Greenback higher. Opening at 0.7245 against its American counterpart, the 0.72 handle was tested in overnight trading with an intraday low of 0.7185. Losses were eventually paired as investors domestically focus on the upcoming election where the latest opinion poll showed a 4% lead by the Labour Party. The New Zealand dollar opens this morning at 0.7230 ahead of the latest release of the Business NZ Manufacturing Index

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