Australian Dollar:
The Australian dollar has taken flight over the past 24 hours in what proved to be a remarkable session for the higher yielding asset. Reaching a high overnight of 0.8027 when valued against its US Counterpart, the Australian dollar has consolidated more than one and half cents worth of gains as investors continue to price in expectations that the US Federal Reserve won’t raise interest rates when they commence their two day meeting tonight. Whilst a rebound in the price of iron ore and softening views of further cuts locally have also played their role a notably weaker US dollar has been the major catalyst for the Australian’s dollar most recent upward run. With volatility levels likely to remain heightened ahead of the FOMC tonight, for the time being last night’s gains have been well consolidated as we open this morning stronger buying 0.8020 US Cents
We expect a range today of 0.7900 – 0.8100
New Zealand Dollar:
Despite a thin economic docket locally the New Zealand dollar has benefitted during the early parts of this week from a weaker Greenback which has been pushed to an eight-week low on bets accommodative monetary settings will remain in place for longer. Suggesting investors have gotten too far ahead of policy makers moves, weaker US data prints have only heightened profit taking opportunities. With so much focus placed squarely on the FOMC this evening the Kiwi remains very much in the hands of the world’s largest central bank ahead of the RNBZ policy decision tomorrow. Opening close to a full cent stronger this morning the Kiwi currently buys 77.20 US Cents
We expect a range today of 0.7670 – 0.7780
Great British Pound:
Britain’s economy grew at a much slower than expected pace during the first three months of this year, figures overnight revealed. In a setback from Prime Minister David Cameron’s pre-election campaign, Gross Domestic Product grew by a mere 0.3 percent in the January-March period. Whilst such soft reads are expected to weigh on the Sterling over the longer-term, last night’s resurgence highlights a currencies value always remains relative with the Great British Pound stronger following a notable shift away from the worlds reserve currency. Opening a full cent stronger when valued against the Greenback this morning at a rate of 1.5338 the Sterling is weaker against both the Aussie (1.9125) and the Kiwi (1.8916)
We expect a range today of 1.9080 – 1.92000
Majors:
The US dollar index, a measure of the world’s reserve currency when valued against a basket of others reached an eight week low overnight as investors continued to sell out of their net long USD positons. With investors gearing up for a generally cautious message to be delivered by the US Federal Reserve tonight, so much of that expectation has been harvested off the back of a slew of poor data prints, a precedent which has continued this week. In economic reports overnight US Consumer confidence missed forecast, notching up its biggest miss since June 2010. Ahead of the expected GDP print tonight also, it’s difficult to determine which sectors of the economy have contributed to the broader measure of growth given retail sales, consumer and business confidence as well housing stats have all trended downward. Lower across the board this morning, Greenback weakness has propelled the Euro which is higher this morning at a rate of 1.0976.
Data releases
AUD: No data today
NZD: Trade Balance, ANZ Business Confidence
JPY: Bank Holiday
GBP: CBI Realised Sales
EUR: German Prelim CPI m/m
USD: Advance GDP q/q, Pending Home Sales m/m, FOMC Statement, Federal Funds Rate
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