Australian Dollar
Expected Range 0.7130 – 0.7330
The Australian dollar found support through trade on Wednesday buoyed by an upbeat first quarter GDP print. The economy expanded at a faster than anticipated pace through the three months to March 31st prompting investors to decrease expectations surrounding a second RBA interest rate cut. Rallying through resistance at 0.7250 the AUD touched session highs at 0.7298 before profit taking took hold and investors looked to square positions ahead of key macroeconomic data events. Attentions today turn to an all-important retail sales print. A soft read could suggest further deflationary pressures and support the shift looser monetary policy setting while stronger than anticipated consumer spending should promote optimism for consumer driven inflation.
New Zealand Dollar
Expected Range 0.6730 – 0.6880
The New Zealand dollar rallied through trade on Wednesday bouncing back through 0.68 as investors looked to higher yielding asset in the face of delays fiscal reform and mixed U.S macroeconomic cues. The Kiwi found support in a stronger than anticipated increase in dairy prices. The Global Dairy Trade index was up 3.4% this morning in what is an encouraging sign for embattled dairy farmers however investors will be looking for signs of a wider turn around in prices before pricing in a significant shift. Attentions now turn offshore as investors look to preliminary U.S employment data ahead of tomorrow all important Non-Farm payroll print.
Great British Pound
Expected Range 1.9650 – 2.0050
The Great British Pound tumbled through trade on Wednesday after new Brexit polls showed a narrowing gap between proponents of the “leave” and “remain” campaigns. Sterling fell against all major currency counterparts as the surveys showed Britons were evenly split with 42% opting to stay within the EU while 45% suggested they would support a European Union exit. Following a series of polls that put the pro-EU campaigners firmly in the box seat the latest opinion piece has spooked investors and affirms the race is far from over. The Pound plunged through 1.4450 and 1.44 losing some 130 points and touching intraday lows at 1.4388. Attentions will be keenly attuned to upcoming polls as markets scramble to price in Brexit risk and identify a possible shift in public momentum.
Majors
Expected Range N/A
The U.S Dollar suffered a heavy sell off through trade on Wednesday following an extension in current tax concessions and a delay in sales tax increases in Japan. In a bid to reinvigorate the economy the BoJ and Prime Minster Shinzo Abe pushed back fiscal reforms for fear of crushing the fragile recovery. The decision highlights the lack of growth and forward progress and heightens concerns surrounding the effectiveness of monetary stimulus forcing a large portion of investors toward safe haven assets. The Greenback slumped to a two week low touching 109.06 while the Euro rallied through 1.1150 touching intraday highs at 1.1193. Despite a stronger than anticipated expansion across domestic manufacturing the Dollar was unable to shake off the momentum shift as U.S construction spending fell to its lowest level in 5 years. The poor print sparked concerns second quarter growth would not meet market expectations. A series of mixed macroeconomic data sets have prompted increasing uncertainty surrounding the likelihood of a Federal Reserve interest rate adjustment in June with just 24% of traders pricing in a policy change down from 30% last week. Attentions now turn to key preliminary labour market data and oil inventories ahead of Friday’s all important Non-Farm Payroll and wage growth reports.