Australian Dollar
Expected Range 0.7480 – 0.7580
The Australian Dollar had a fairly quiet day retreating from the intraday high of 0.7573 to finish the day buying 75.32 US cents. In the US FOMC member George said that interest rates are currently too low and that the Federal Reserve should be looking to gradually increase interest rates to avoid extra risks. The market is keenly watching the Federal Reserve decision in a few weeks looking for any indication that they may be looking to raise interest rates in the future. With limited data out today expect the market once again to take direction from external factors.
New Zealand Dollar
Expected Range 0.7180 – 0.7280
The New Zealand Dollar performed poorly on Monday falling from the 14 month highs to open this morning buying 0.7219 US Dollars. As the market took a breath following a very strong end to last week the USD was able to claw back some of the losses from the week before. The house prices in New Zealand remain a concern for the big banks with Westpac reducing the maximum length of interest only loans from 15 years to 5 years. Investors which make up a large proportion of the buyers in the market at the moment so the move to limit interest only loans is an effort from the bank to reduce exposure to a potential crash in housing prices.
Great British Pound
Expected Range 1.7100 – 1.7400
The Pound drifted higher against a basket of currencies last night as it emerged that Theresa May would stand as the sole candidate for the Conservative Party to replace outgoing Prime David Cameron. Mrs May is expected to be sworn in this Wednesday and will have the task of navigating Britain out of the EU in the coming weeks and months. Versus the US and Japanese Yen, Pound Sterling rallied to recoup some of the losses it took late last week. With the Bank of England meeting this Thursday and the markets expecting an interest rate cut as well as the potential of a fresh round of stimulus, volatility is set to remain. In Sydney, the Australian Dollar and New Zealand Dollar opens lowers against the Pound at 1.7230 and 1.7974 respectively.
Majors
Expected Range N/A
The Japanese yen had a bad day losing ground against most major currencies as Prime Minister Shinzo Abe won the election in the upper house. The Prime Minister has signalled the possibility of a new stimulus plan in the near term. This saw the USDJPY jump from 76.14 to where it opens today at 77.42. It was a good day for the USD who also saw positive moves against the AUD and the NZD managing to retrace some of the losses from last week. With two other members of the FOMC speaking tonight the market will continue to look for any hints about the next decision of the Federal Reserve.