Australian Dollar:
The Australian dollar continued to trend lower yesterday following trade data from China which showed a slump in imports which had extended to a 13 straight month whilst exports fell by an annualised 3.7 percent during November. Mixed with crumbling commodity prices the Australian dollar slumped to a low of 0.7186 when valued against its US Counterpart with the NAB’s monthly business survey only providing a bare minimum level of support. Opening weaker this morning at a rate of 0.7204, the Australian dollar has already lost close to two percent this month as investors look towards another round of macro releases today from the world’s second largest economy.
We expect a range today of 0.7160 – 0.7240
New Zealand Dollar:
The New Zealand dollar opens this morning 20 basis points lower a rate of 0.6628 when valued against its US Counterpart. With equities falling on both sides of the Atlantic, the New Zealand dollar has done relatively well to keep its head above water as commodity and growth linked currencies remain under pressure given the degree of global uncertainty. Heightening growth concerns yesterday a disappointing trade report from China has simply added to the nervy feel across broader markets as investors brace themselves for the RNBZ interest rate decision tomorrow followed by the Fed next week.
We expect a range today of 0.6590 – 0.6660
Great British Pound:
Support at the 1.5000 handle has failed to hold over the past 24 hours as the Great British Pound once again lost ground when valued against its US Counterpart. Making a decisive break below the key target, lows of 1.4956 were briefly witnessed as the Sterling remains under pressure this morning opening at a rate of 1.4995. Weighed down by the global collapse in oil, commodity and energy prices this week’s main event comes on Thursday as the BOE meet to discuss monetary settings. Whilst opening lower versus the Kiwi (2.2621), the Sterling is stronger against the Aussie (2.0818).
We expect a range today of 2.0750 – 2.0880
Majors:
The sell-off across global equity markets continued on Tuesday as oil prices oscillated near their seven year low. Dropping below $US40 per barrel for the first time since 2009, broader weakness across commodities, precious metals and the energy sector has investors concerned that excess supply could sooner rather than later effect consumption, given measures of industrial production and manufacturing in mainland Europe and China have showed signs of softening over the past two months. With weak Chinese trade data unsettling investors for much of yesterday’s session, it is still the widely held consensus view that the Fed will next week raise interest rates, a move many see as mandatory if not to simply re-assure credibility. Sidelined over the past 24 hours, the US dollar opens weaker versus the Euro (1.0888) whilst steady against the Yen (123.048).
Data releases
AUD: Westpac consumer confidence, Home Loans m/m
NZD: No data today
JPY: Core Machinery Orders m/m
GBP: No data today
EUR: No data today
USD: Crude Oil Inventories
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