Australian Dollar
Expected Range 0.7620 – 0.7720
The Australian Dollar open this morning buying 76.72 US cents which is up from the weeks open. Diminishing expectations for a Federal Reserve interest rate hike this year and an improving oil price have help give the AUD some support after a disappointing Friday. The recent rate cuts in Australia, New Zealand and the UK have seen global growth expectations reduce combined with the recent soft economic data out of the US has mean that the market is forecasting the next rate hike by the Federal reserve may be pushed into 2017. In Australia the recent decision to cut interest rates has meant that extra focus will be put on the meeting minutes which are due to be released today with the market looking to see if there are any clues as to potential rate moves.
New Zealand Dollar
Expected Range 0.7160 – 0.7260
The New Zealand Dollar was buoyed on Monday by a weak USD and was able to push through the 72 cent mark and is currently holding above that level at 0.7212. The rate cut last week failed to provide a drop in the exchange rate which the RBNZ was hoping for instead the relatively high interest rates combined with a good credit rating has meant the New Zealand Dollar has remained and attractive offer for investors. The next 24 hours is shaping up to be a big data day with US CPI data out tonight the result will be closely monitored by the Federal Reserve and a soft result will further dampen expectations of a rate hike this year in the US. Dairy prices and employment data out tomorrow morning.
Great British Pound
Expected Range 1.6680 – 1.6880
The Pound continued to slide yesterday against the US Dollar as the market continues to weigh up the final impact of June Brexit leave vote and the impact it will have on future interest rates and growth within the UK. The pair trade between to a day low of 1.2870 and a high of 1.2920 despite the fact the confirmation from PM Theresa May’s offsiders that the British government would not invoke Article 50 of the Lisbon Treaty until at least next year and would fight for a better deal with the EU for Britain’s departure. Against the Aussie and Kiwi the Pound is changing hands at 1.6770 and 1.7030 respectively.
Majors
Expected Range N/A
The Japanese GDP data failed to impress yesterday with a flat result for the quarter. The market was expecting a modest growth of 0.2% but now that growth has failed to materialise the attention now turns towards the possibility of an expansion to the stimulus packages that were recently announced. The expectations around when the next Federal Reserve rate hike will occur continues to weigh on the USD. There is a key release out tonight with the CPI number one of the key indicators that the Federal Reserve looks at when making its decision another soft result will see expectations of a rate hike pushed back even further and likely have a negative effect on the USD.