Australian Dollar
Expected Range 0.7000 – 0.7150
The Australian dollar was able to consolidate its position above 0.70 against the USD to finish the week 80 points up from the weeks open. The Australian dollar has been supported by a dovish Federal Reserve in the US and the stabilisation of oil prices which have allowed the AUD to recover from lows of 0.6827 seen two weeks ago. On Friday the AUD did push through the 0.71 cent mark to reach highs of 0.7140 after the Bank of Japan indicated that it was going to move interest rates into the negative in the hope to boost inflation. However overnight trade saw the AUD pull back to finish the day where it began at 0.7082. The main focus of today will be the Manufacturing PMI and Caixin Manufacturing PMI data out of China today with the link between the Australian Dollar and Chinese performance playing a role. Looking forward this week there is a bit of information being released locally including the Reserve Bank’s Interest rate decision tomorrow, trade balance out Wednesday and Retail sales data out Friday.
New Zealand Dollar
Expected Range 0.6420 – 0.6550
The NZD opens this morning at 0.6483 after spending most of last week bouncing around the 0.6450 mark. After getting an initial boost when the Bank of Japan announce that that it would decrease the amount of interest it would pay on bank deposits which exceed those required by regulators to -0.1% the move was relatively short lived and during Wall Street trade the NZD pulled back from highs of 0.6543 to where we start this morning. With no major data coming out locally which is expected to affect the NZD the market will be looking offshore specifically the Chinese data coming out around lunch time today.
Great British Pound
Expected Range 2.0000 – 2.0450
The Great British Pound has closed the week over 2 cents down against the AUD after opening the week at 2.0348 the week closed at 2.0101. The move is mostly on the back of the AUD strengthening on the back commodity prices specifically oil prices start to regain losses and as news coming out of China starts to stabilise. Looking forward to today the UK will have their Manufacturing PMI data released today with the market expecting a slightly expansionary number of 51.8. The GBP opens today at 1.4242 against the USD and 2.1954 against the NZD.
Majors
Expected Range N/A
The major piece of news out Friday was the Bank of Japans decision to move interest rates on bank deposits which exceed regulatory requirements to -0.1%. While it had been suggested that they would cut interest rates during the decision the move into negative territory caught the market by surprise combined with comments from the Bank of Japan which has said that they would potentially continue to cut interest rates further should it be required. The Eurozone CPI Flash Estimate y/y came in along with expectations at 0.4% however it was not enough to keep the EUR above 1.09 against the USD. After starting the day at 1.0939 the Euro closed the day at 1.0829 against its US counterpart.