Australian Dollar:
Having ran out of steam regularly when valued up above the 78 US Cents level last week the Australian dollar opens this morning lower at a rate of 0.7636 when valued against its US Counterpart. During a week dominated by mixed data flows from the world’s largest economy unfavourable headlines from Greece has also weighed heavily on broader sentiment as creditors continue to wrestle with policy makers ahead of a payment deadline this week. In what’s shaping up as an event packed week investors will be firstly looking towards the Reserve Banks interest rate decision tomorrow followed by Wednesday’s national accounts.
We expect a range today of 0.7600 – 0.7680
New Zealand Dollar:
Despite a revised US GDP figure which came in below expectations for the first quarter along with a disappointing consumer confidence indicator, the US dollar still managed to maintain its upward trajectory late last week with the world’s reserve currency still attracting interest off the back of broader safe-haven flows. Opening this morning significantly lower at a rate of 0.7093 when compared to its high last week of 0.7330, this week is shaping up as important one ahead of key economic developments today which come in the form of the HSBC Final Manufacturing PMI read from China followed by a similar gauge from the United States this evening.
We expect a range today of 0.7030 – 0.7120
Great British Pound:
The Great British Pound opens steady, albeit lower at a rate of 1.5292 when valued against its US Counterpart this morning. Ahead of an avalanche of economic announcements this week the Sterling remains at risk of further downward moves should the chances of a US rate rise outstrip the probability of a similar move by the Bank of England. With the BOE expected to hold rates when they meet on Thursday, data prints such as Friday’s US non-farm reading will be given heightened importance. On the horizon this evening PMI reads from the UK and US will be closely watched as the Sterling opens weaker against the Australian dollar (1.9989) whilst stronger against the New Zealand dollar (2.1534).
We expect a range today of 1.9940 – 2.0040
Majors:
The 18-nation euro remains under considerable pressure upon open this morning with Greece and creditors at least agreeing on the fact a deal needs to be struck quickly, particularly given Athens have already missed their self-imposed deadline for finding a solution. Given the IMF is owed a substantial repayment by June 5th, Greek developments continue to hold the key for broader risk sentiment over the coming days, something which threatens to heighten currency volatility. In other developments late last week, the United States road to recovery remains a bumpy one with a revised GDP estimate and a consumer sentiment gauge both falling short of their expected mark. In a week which has policy statements from the BOE, ECB and RBA Friday’s US non-farm payroll report will also be of critical importance. Stronger against the Yen this morning the US dollar currently swaps hands at a rate of 124.102.
Data releases
AUD: Building Approvals m/m
NZD: Bank Holiday
JPY: Final Manufacturing PMI
GBP: Manufacturing PMI
EUR: Spanish Manufacturing PMI, Italian Manufacturing PMI, German Manufacturing PMI,
USD: ISM Manufacturing PMI
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