Australian Dollar:
Despite hitting a mid-week high of 0.7450 when valued against its US Counterpart further wind has been knocked out of the Aussies sails over the past five days of trade. Falling to a fresh six year low of 0.7259 on Friday, Chinese manufacturing output unexpectedly hit of a 15-month low. Weaker also in the face of a stronger US Dollar the domestic unit opens weaker this morning as it buys 72.69 US Cents. In a week set to be driven by fundamental rate expectations, rhetoric from the US Federal Reserve along with broader growth measures within the world’s largest economy will be critical in driving price action and ultimately the attractiveness of the Australian dollar.
We expect a range today of 0.7230 – 0.7320
New Zealand Dollar:
The New Zealand dollar remained out of favour with investors on Friday following a downbeat preliminary manufacturing read from China, New Zealand’s largest trading partner. Heightening concerns which surround China’s growth trajectory, falling global commodity prices have also played there part in dragging the Kiwi lower. Opening notably weaker this morning at a rate of 0.6568 when valued against its US Counterpart macro developments from the United States this evening will be of critical importance in what’s shaping up as an otherwise quiet 24 hour window.
We expect a range today of 0.6520 – 0.6620
Great British Pound:
The Great British Pound has struggled to trade above key price levels when valued against its US Counterpart last week with trading ranges solidifying significantly ahead of congested levels close to the 1.5650 mark. With direction last week being driven mainly by BOE minutes which showed an improved outlook, GDP numbers due for release tomorrow are shaping up as the Sterling’s next major hurdle. Opening this morning virtually unchanged when valued against its US Counterpart at 1.5505 the Sterling is stronger against both the Australian dollar (2.1319) and the New Zealand dollar (2.3581).
We expect a range today of 2.1270 – 2.1370
Majors:
The US dollar maintained its appeal last week, as growth and commodity backed currencies struggled. Assisted by lower weekly jobless claims and a positive Flash Manufacturing PMI read the only slight disappointment for the Greenback on Friday came in the form of New Home Sales which unexpectedly declined in June, to a seven-month low. In a week which is likely to pivot around Thursdays FOMC meeting there remains only four more opportunities this year for policy makers to deliver on the 50 basis points worth of tightening that have been outlined in previous forecasts. As it stands there remains a disconnect between forecasts and pricing, a mismatch which promotes heightened levels of volatility. Stronger across the board this morning, second quarter GDP from the United States will also be closely watched as interest rate projections have been built on the belief a steady recovery has occurred since the transitionary weakness witnessed during the first three months of the year.
Data releases
AUD: No data today
NZD: No data today
JPY: No data today
GBP: No data today
EUR: German Ifo Business Climate
USD: Core Durable Goods Orders m/m
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