Australian Dollar:
The Aussie opens virtually unchanged this morning after sitting on the fence throughout the majority of Friday’s trade session. A lack of local data releases saw the AUD/USD trade between a narrow range of 44 points witnessing lows of 0.7353 and highs of 0.7397. High AUD volatility was experienced earlier on in the week as the Public Bank of China (POBC) chose to devalue the Chinese Yuan (CNY) reference rate which was interpreted by many as an attempt to help support exports in a struggling economy. However, with the CNY decline likely to slow and the POBC stating that this is merely a move towards a more market orientated currency, the ambiguity surrounding this chapter seems to have settled for the time being. With no economic announcements on the cards today the Australian Dollar is expected to tread water around similar levels throughout today’s session. The AUD/USD starts at 0.7370.
We expect a range today of AUD/USD 0.7330 – 0.7410
New Zealand Dollar:
The NZ Dollar value has fallen across the board after domestic sales figures released on Friday came in well below expectations. A report from Statistics New Zealand revealed that in the Apr-June quarter sales at the retail level had increased by only 0.1% while an increase of 0.5% was forecasted. As this information is directly linked to consumer spending and economic activity, this result has weighed down on the Kiwi which saw lows of NZD/USD 0.6512 intraday. With a clear economic docket on the cards for the local currency the Kiwi is expected to remain range bound today while looking overseas for any direction. The NZD/USD opens at 0.6525.
Great British Pound:
The Pound Sterling has ticked higher throughout trade on Friday as official reports pointed out that construction output had returned to moderate growth in June, coming back from a previous slowdown in April and May. The change in the total amount builders spent on construction projects increased by 0.9%, and did miss expectations of a 2.4% increase, however printed well about the previous month’s result of a 1% decrease. The GBP rallied against its major counterparts off the back of this news and opens higher at 2.1202 and 2.3904 against its Australian and New Zealand counterparts respectively. Traders are expected to anxiously await inflationary data being released tomorrow as there are no domestic economic reports scheduled for release today.
We expect a range today of GBP/AUD 2.1160 – 2.1240
Majors:
The EUR/USD dropped off on Friday as a myriad positive US economic data was released supporting the Greenback. PPI and Core PPI inflation numbers, along with industrial production figures all printed well above forecast which has pointed to a consistent economic recovery in the US, and supports the idea that the Federal Reserve is on track to hike rates before the year is over. In the Eurozone finance ministers have agreed to provide Greece with an 86 billion euro loan as Greek lawmakers agreed to accept all conditions put to them by the ECB. With only light impact data being released through the day’s trade session, limited volatility is expected today with the EUR/USD. The EUR/USD commences at 1.1113.
Data releases:
CAD: Foreign Securities Purchases
CHF: Retail Sales y/y
EUR: Trade Balance, German Bub Monthly Report
GBP: Rightmove HPI m/m
JPY: Prelim GDP q/q, Prelim GDP Price Index y/y
USD: Empire State Manufacturing Index, NAHB Housing Market Index, TIC Long-Term Purchases