Australian Dollar
Expected Range 0.7420 – 0.7680
The Australian dollar suffered a heavy sell off through trade on Tuesday as investors reacted to a widening trade balance deficit and the RBA’s rate statement. The AUD gapped lower early as Trade balance numbers showed a softening Trade Weighted Index and burgeoning trade balance deficit. The Aussie dipped 25 points before markets stepped into pare positions ahead of the RBA rate statement and cash rate announcement. Unsurprisingly the central bank left rates on hold at 2% prompting an immediate bounce to intraday highs at 0.7630 before analysts began absorbing the accompanying rate statement and the attention noted to the higher exchange rate. The board noted that while the AUD rally somewhat reflects a recovery in commodity prices and monetary policy developments globally, under the present circumstances further appreciation could complicate the adjustment underway in the economy. The comments prompted an AUD sell off forcing the unit through 0.7550 to intraday day lows at 0.7508. Attentions today turn to U.S monetary policy and the FOMC’s March meeting minutes. A dovish outlook would like spell another USD sell off while a hawkish showing may force a deeper AUD correction.
New Zealand Dollar
Expected Range 0.6710 – 0.6880
The New Zealand Dollar suffered a deeper sell off through trade on Tuesday sold off on weaker business confidence and softening commodity prices. A dramatic decline in the NZIER business confidence report set the Kiwi on a lower track prompting an immediate 40 point sell off. The currency then followed its antipodean counterpart lower still as the RBA’s monthly monetary policy rate statement left the door open for future rate adjustments. Touching intraday lows at 0.6757 the NZD then found support in upbeat dairy sales. Dairy prices rose for just the 2nd time this year surprising investors and allowing markets to recoup some of the day’s early losses bouncing back through 0.68 to open this morning buying 0.6802 U.S cents. Attentions today remain offshore with focus shifting to the FOMC’s March meeting minutes as investors seek a wider scope of guidance on future U.S monetary policy expectations.
Great British Pound
Expected Range 1.8625 – 1.8925
The Great British Pound gave up gains earned earlier this week losing some 150 points to touch intraday lows at 1.4119. Increasing Brexit fears ahead of the looming election in three months’ time forced Sterling lower as investors are reluctant to support any significant GBP upturn in the face of Global growth risk and the uncertainty that accompanies a “leave vote”. Attentions today turn to the FOMC’s March meeting minutes for direction and Fed policy guidance.
Majors
Expected Range N/A
The Greenback continued its precipitous downward slide through trade on Tuesday touching 17 month lows against the Japanese Yen. Having fallen below 110.00 for the first time since November 2014 the USD touched intraday lows at 109.90 as increasing concerns surrounding global growth prospects continue to weigh on the Investor interest rate expectations. The move caps a remarkable reversal that has seen the dollar issue losses beyond 8% against the Yen through the year to date and as BoJ stimulus measures remain impotent support for the JPY will likely continue in the face of a slower path of appreciation across U.S monetary policy. The Euro was however unable to capitalise on extended USD weakness. The 19 nation combined unit moved lower on softer than anticipated German factory orders and a slow start to wider business activity through the first 3 months of the year. Touching session lows at 1.1337 the Euro pared losses rallying to close largely unchanged buying 1.1384. Attentions today will be squarely fixed on the FOMC and the release of its March Meeting Minutes. Investors will be keenly attuned to the language and rhetoric seeking any forward guidance and affirmation current market expectations may be overly pessimistic.