Australian Dollar:
The Australian dollar firmed considerably yesterday, rallying 1.5 percent after statistics showed Australia’s unemployment rate had fallen to 5.9 percent in October. Picking up notable momentum and breaking comfortably through the 71 US Cents handle the strength of yesterday’s report took many investors by surprise with headline employment gains of 58 600 greatly exceeded the forecasted number of 15 000. Jumping to a high just short of the 0.7150 mark when valued against its US Counterpart the Australian dollar opens this morning more than a full cent above its monthly low as it currently buys 71.22 US Cents. In what’s likely to be a significantly quieter session today, US dollar drivers this evening remain set to be a key contributor to the Aussies near term value.
We expect a range today of 0.7080 – 0.7160
New Zealand Dollar:
Whilst the broader bias has been slanted towards near-term weakness, the Kiwi has encountered a somewhat directionless 24 hour window, struggling to consistently maintain a value up above the 0.6550 when valued against its US Counterpart. Given the softening influence of lower commodity and energy prices overnight, several US Federal Reserve officials also maintained the status quo that the time for higher rates is nearing, hence shoring up the US dollars elevated price for the time being. Steady this morning the New Zealand dollar buys 0.6537.
We expect a range today of 0.6500 – 0.6570
Great British Pound:
Consolidating its gains from mid-week the Great British Pound has been able to keep its head up above the 1.5200 mark when valued against its US Counterpart. Whilst still battling dollar bulls amid fears also of persistently low inflation, improved data prints over the coming months will be critical when attempting to improve the dovish rhetoric which is currently flowing from the BOE. In the absence of any substantial support overnight, over the coming month’s data prints will need to significantly improve given the Sterling’s fragile foundations. With resistance in the near-term currently visible close to the 1.5250 mark, this morning the Sterling opens virtually unchanged at a rate of 1.5220
We expect a range today of 2.1320 – 2.1440
Majors:
The Dow Jones Industrial average declined approximately one percent during overnight trade, with the price of crude sliding to almost a three year low. Whilst the fall in broader energy stocks managed to keep commodity backed currencies in check, the US dollars value appeared somewhat unaffected by a string of comments from Federal Reserve Policy officials in reference to raising borrowing costs for the first time in a decade. Confirming that the conditions for tighter policy could soon be satisfied comments by New York Fed President William Dudley were perhaps the most definitive. Still lurking in the background overnight, views hurting risk sentiment, updated economic forecasts from a well sourced offshore bank, suggested the two biggest economic risks for the year ahead stretch well beyond higher US rates and include a revival of US inflation as well faltering Chinese investment. Unchanged versus the Yen this morning at 122.66 the Euro opens half a cent stronger when valued against the dollar at 1.0792.
Data releases
AUD: No data today
NZD: No data today
JPY: No data today
GBP: MPC Member Haldane Speaks
EUR: Flash GDP q/q, German Prelim GDP q/q
USD: Core Retail Sales m/m, PPI m/m, Core Retail Sales m/m, Prelim UoM Consumer Sentiment
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