Australian Dollar:
The Australian dollar this morning opens in a moderately stronger position buying 74.03 US Cents. During a volatile session on Friday which was highlighted by a positive Inflation print from China as well as steady job gains from the United States. US labour market numbers which fell short of expectation within the world’s largest economy assisted in keeping the Greenbacks upward ascendency somewhat under wraps. On the data front this week investors will be keeping a close eye on both business and consumer confidence reads, where it’s expected that the gap between the optimistic business sector will be maintained when compared to the pessimism of the household
We expect a range today of 0.7310 – 0.7480
New Zealand Dollar:
The New Zealand Dollar benefitted from a weaker Greenback late last week, touching a high of 0.6616 when valued against its US Counterpart. Whilst a shortfall in a US labour market report acted as the initial upward trigger further Kiwi strength was underpinned by an announcement by Fonterra Cooperative that they would offer interest free loans to farmers who have struggled off the back of a notable fall in dairy prices. Opening moderately stronger this morning at a rate of 0.6602 additional rhetoric from the US Federal Reserve tonight will be a key currency driver.
We expect a range today of 0.6510 – 0.6680
Great British Pound:
The Great British Pound moved lower through trade on Friday as investors responded to a solid U.S labour market report. While falling slightly short of analyst expectations the world’s largest economy added some 215,000 new jobs throughout July enough to satisfy and support calls for a September monetary policy adjustment. Swaps markets are now pricing in a 52% chance of a rate amendment next month up from 48% prior to the anticipated data release. Cable was vulnerable leading into the data set after traders hawkish expectations prior to Thursday’s Bank of England policy meeting were left wanting and Sterling tested technical supports breaking through 1.5460 and touching intraday lows of 1.5427 before finding support into the close.
We expect a range today of 2.0800 – 2.01020
Majors:
Despite a generally solid labour market report which showed the world’s largest economy had added a further 215 000 new jobs to the employment pool last month. Investors couldn’t help but feel disappointed after consensus forecasts were looking for a number in excess of 225 000. Whilst Friday’s result wasn’t significant enough to trigger a substantial shift in the accompanying interest outlook, the debate surrounding the initial lift off date remains well and truly alive. Having touched its highest level in over four months, the US Dollar Index retreated late last week, heightening concerns surrounding stability in the lead up to the US Feds first rate hike since 2006. In other currency moves the EUR opens stronger when valued against the Greenback as it currently swaps hands at a rate of 1.0959.
Data releases:
AUD: No Data
NZD: No Data
JPY: Current Account, Bank Lending y/y, BoJ Monthly Report, Consumer Confidence and Economy Watchers Sentiment.
GBP: No Data
EUR: Sentix Investor Confidence
USD: FOMC Members Lockhart and Fisher Speak and Labour Market Conditions Index m/m.