Australian Dollar:

The Australian dollars struggles continued midweek marred by an array of poor local data and broad US dollar strength. RBA Assistant Governor Kent spoke early on about how the lower Aussie dollar will be needed to help the economy recover after the fading mining boom. He also mentioned he believed the higher yielding currency was still relatively expensive. Westpac consumer sentiment was back in the negative however was above the December lows while home loans numbers printed a similar result showing a reduction of 3.5 per cent in the change of new loans for the last month. All in all the Asian markets did not react too heavily despite the array of negative news while overnight the overseas markets took a different stance. The Aussie was sold off across the board reaching 6 year lows bottoming out at 0.7562 before opening this morning at 0.7579. Today eyes will turn to employment data released just before midday.

We expect a range today of 0.7550 – 0.7630

New Zealand Dollar:

In another day which lacked domestic data releases the New Zealand dollar remained steady after previously falling against the Greenback over the last few days of trade. The Kiwi moved in a tight 20 point range as investors waited patiently on Chinese numbers and Thursday’s rate announcement. The Chinese industrial production was well below forecast while overnight US dollar broad strength continued as the Kiwi struggled to hold its ground. The NZ dollar fell as low as 0.7188 before opening this morning at 0.7201 substantially weaker than Wednesday. With the rate announcement to come early this morning investors will watch the accompanying statement for clues as to future moves with regards to monetary policy.

We expect a range today of 0.7200 – 0.7300

Great British Pound:

The British Pound was heavily sold off across the board last night as local data missed the mark while the theme of US dollar strength continued. Aside from ongoing USD strength which has played a large factor in the Cable’s weakness the fall of UK manufacturing and industrial production was the main catalyst. Cable hit lows of 1.4891 before recovering to open this morning at 1.4924, over a cent lower than Wednesday. Despite the higher yielding currencies weakness elsewhere in the market the Sterling could not take advantage losing ground against both the AUD(1.9687) and NZD(2.0700). Tonight presents a relatively light session of local economic data however a speech from BoE Governor Carney should provide direction later on.

We expect a range today of 1.9630 – 1.9710


The Euro continued to fall during Wednesday’s trade dropping below 1.06 against the US dollar which is a level not previously seen in over 12 years. Quantitative easing in the Eurozone is the main protagonist however strong US numbers are seeing the Greenback strengthen across the board in anticipation of an interest rate increase. The Euro fell as low as 1.0510 before recovering to open this morning at 1.0540 against the US dollar. Tonight will see Retail sales as well as unemployment numbers from the US and investors will watch closely for results which could be strong indicators as to the US Fed’s next move on monetary policy.

Data releases:

AUD: MI Inflation Expectations, Unemployment Change, Unemployment Rate 

NZD: Official Cash Rate, RBNZ Rate Statement, RBNZ Monetary Policy Statement, RBNZ Press Conference, FPI m/m, RBNZ Gov Wheeler Speaks, REINZ HPI m/m

JPY: BSI Manufacturing Index, Tertiary Industry Activity m/m, Consumer Confidence

GBP: BOE Quarterly Bulletin, RICS House Price Balance, Trade Balance, BOE Gov Carney Speaks

EUR: German Final CPI m/m, French CPI m/m, German Buba President Weidmann Speaks, Industrial Production m/m, Spanish 10-y Bond Auction

USD: Core Retail Sales m/m, Retail Sales m/m, Unemployment Claims, Import Prices m/m, Business Inventories m/m, Natural Gas Storage, 30-y Bond Auction

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