Australian Dollar:
Recording its worst seasonally adjusted deficit since February 2008, the ABS yesterday reported that imports were up 4 percent during April whilst exports tumbled by 6 percent. Highlighting the pace of Australia’s economic transition, a separate barometer of economic health also fell flat yesterday following the release of April Retail Sales which comfortably missed the benchmark forecast of a 0.4 percent rise. Triggering a notable shift lower for the Australian dollar, the domestic unit plunged from a high of 0.7787 when valued against its US Counterpart down to a low of 0.7664. Opening weaker this morning at rate of 0.7685, a flat intraday session is expected, ahead of tonight’s non-farm US payrolls report.
We expect a range today of 0.7630 – 0.7740
New Zealand Dollar:
The New Zealand dollar has done well to maintain its value over the past 24 hours, opening steady against the Greenback this morning at a rate of 0.7129. Trading in a narrow 70 basis point range when valued against the world’s reserve currency the Kiwi remained well supported despite the bearish headlines from Greece which continue to weigh on broader risk sentiment. Given the absence of any major economic developments from Asia today, the NZD/USD is expected to hold up above the 71 US Cents mark ahead of tonight’s US non-farm payroll result with lower volumes suggesting that investors are already sitting on their hands in anticipation.
We expect a range today of 0.7080 – 0.7190
Great British Pound:
In a unanimous decision The Bank of England kept interest rates at a record low of 0.5 percent overnight, choosing instead to wait and see how well Britain’s economy can rebound from a soft start to the year. Following previous reports which showed an economic expansion of only 0.3 percent during the first quarter, no changes in policy are expected to at least early 2016. In what proved to be a widely expected move the Sterling’s reaction was muted with some upside momentum flowing through later in the session. Opening this morning 0.2 percent higher when valued against the US dollar (1.5365) the Sterling is also stronger against both the Australian dollar (1.9968) and the New Zealand dollar (2.1537).
We expect a range today of 1.9900 -2.0020
Majors:
US Stocks have declined overnight with the S&P 500 Index lower off the back of falling oil and gold prices. Despite signs of labour market tightening which came in the form of record low weekly unemployment claims overnight, there has already been signs of nervousness across markets in anticipation of tonight’s non-farm employment result which is expected to show the world’s largest economy produced 226 000 new jobs last month. In other significant developments the International Monetary Fund downgraded the US growth outlook from 3.1 to 2.5 percent for the year ahead, stating that policy makers should consider raising interest rates later, Ie. Not until the first half of 2016. With Greece remaining still very much a drag on broader measures of sentiment, progress in debt negotiations have been slow as talks continue in Athens. Opening stronger against the Euro at a rate of 1.1237 this morning US dollar is also stronger when valued against the Yen at 124.36
Data releases
AUD: No data today
NZD: No data today
JPY: No data today
GBP: No data today
EUR: No data today
USD: Non-farm employment change, Unemployment rate
Learn more about Michael Judge