Australian Dollar:

The Australian dollar continued to struggle on Tuesday as the prospect of an interest rate rise sooner than anticipated in the US weighed on the higher yielding currency. The AUD was near 5 year lows against the Greenback early on falling below the US77 cent handle quickly, with poor domestic and offshore figures leading the way. NAB business confidence was first up just before midday disappointing with a print of 0. The drop in confidence is believed to be underpinned by talks of a further rate cut by the RBA implying continued economic struggles. Chinese inflationary data later on had little affect just beating out forecasts while overnight the AUD continued to fall touching lows of 0.7602, before opening this morning substantially weaker at 0.7619. Today all eyes will focus on Home loans and Consumer sentiment as well as industrial production numbers out of China.

We expect a range today of 0.7580 – 0.7660

New Zealand Dollar:

With a lack of local data to spur the higher yielding NZ dollar the Kiwi continued to drift lower against the Greenback on Tuesday. Underpinned by the prospect of a US interest rate increase earlier than expected the NZD lost ground touching lows of 0.7280 during Asian trade. Chinese inflationary numbers had little impact while overnight the Kiwi’s struggles continued, opening this morning around 1 cent lower at 0.7272. Today focus will be on further Chinese numbers while a talk from ECB president Draghi overnight could bring volatility to the market.

We expect a range today of 0.7230 – 0.7310

Great British Pound:

The GBP fell in line with the majority of other major currencies on Tuesday losing over 150 points against a strong US dollar. With the absence of any high impact local data, Bank of England’s Governor Carneys speech was watched closely for direction. Carney talked about how inflation was likely to remain around zero for the coming months and mentioned most of the decrease was as a result of weakness in commodity prices. UK growth output is increasing in line with expectations and with wages also climbing a rise in interest rates is still on the cards as previously anticipated. The comments were not enough to overshadow a strong US dollar however the GBP managed to gain on the higher yielding currencies opening this morning stronger against the AUD(1.9766) and NZD(2.0702). Today there is a heavy array of local economic data being released with all eyes specifically on manufacturing production for guidance.

We expect a range today of 1.9725 – 1.9805

Majors:

As the monetary policy of the European Union and United States continue to appear to be on opposite paths the Euro has continued to fall against the Greenback. The Euro already weakened by the Central Banks easing program released earlier this year fell further after the purchasing program began on Monday. The EUR touched lows of 1.0692 against the US dollar overnight opening this morning substantially weaker at 1.0696. Tonight will see ECB President Draghi speak in Frankfurt while investors will continue to closely monitor further US numbers as to additional indications of a time frame to an interest rate hike.

Data releases: 

AUD: RBA Assist Gov Kent Speaks, Westpac Consumer Sentiment, Home Loans m/m

NZD: REINZ HPI m/m,

JPY: Core Machinery Orders m/m, PPI y/y

GBP: Manufacturing Production m/m, Industrial Production m/m, MPC member Weale speaks, NIESR GDP Estimate

EUR: French Final Non-Farm Payrolls q/q, ECB President Draghi Speaks

USD: Crude Oil Inventories, 10-y Bond Auction, Federal Budget Balance, Bank Stress Test Results

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