Australian Dollar
Expected Range 0.7530 – 0.7680
The Australian Dollar opens this morning having recouped some of Tuesday’s losses rallying back through 0.76. Offering little throughout the domestic trading session the AUD struggled to break outside a 30 point range between 0.7530 and 0.7560 before European and North American markets led extended USD shorting ahead of and following the release of the Fed’s March meeting minutes. The Minutes highlighted the Fed’s reluctance to amend monetary policy in the current global environment and noted that the limited ability for “monetary policy to respond to shocks from abroad” warranted caution. The Aussie rallied to touch intraday highs at 0.7617 before settling lower buying 0.7598 U.S cents at time of writing. Attentions turn again to the Fed and Fed officials as Janet Yellen hits the wires, joining an economic discussion at International House in New York. Continued dovish rhetoric could prompt further USD weakness leading into what is shaping up to be a relatively quiet weekly close data wise.
New Zealand Dollar
Expected Range 0.6730 – 0.6880
The New Zealand dollar moved higher through trade on Wednesday creeping back through 0.68 as investors responded to the Federal Reserve’s March Meeting minutes. While the Fed noted it still expected to raise rates twice throughout the year it highlighted the growing global economic slowdown and limited ability of monetary policy to respond to shocks warranted caution and failed to deliver a definitive timeline of change. The minutes did little to incite investors and analysts to move away from current bets on the path of future interest rate policy and the NZD touch intraday highs at 0.6839. Settling lower into the open the NZD buys 0.6819 at time of writing as attentions turn to Fed Chair Janet Yellen as she hits the wires. Investors will be keenly attuned to the underlying tone of her comments wherein a continued dovish bias could force an extension in the current USD sell off.
Great British Pound
Expected Range 1.8325 – 1.8825
The Great British Pound enjoyed a topsy turvy trading session Wednesday shedding 150 points on early Brexit fears before recouping losses in the wake of the Fed’s meeting minutes. Sterling touched intraday lows at 1.4015 before bouncing higher in response to the Federal Reserve’s March meeting minutes and a muted investor reaction. The minutes affirmed the FOMC’s cautious policy outlook and failed to prompt a move away from investor’s current expectations surrounding the path of future interest rate increases. Cable rallied to recoup all losses touching 1.4169 before settling lower into this morning’s Australasian open buying 1.4115 at time of writing. Attentions now turn to manufacturing numbers Friday for macroeconomic direction while Brexit fears dominate investor sentiment.
Majors
Expected Range N/A
Monetary Policy expectations prompted extended shorting of US Dollar positions through trade on Wednesday forcing the Greenback lower across a basket of currency counterparts. The World’s base unit plunged below 110 JPY for the second consecutive day marking fresh 17 month lows touching 109.38. Investors set positions on expectations the BoJ would avoid intervening in a bid to halt the Yen’s rapid appreciation, while U.S monetary policy expectations remain little changed following the release of the Fed’s March meeting minutes. Fed officials debated whether an interest rate hike was appropriate however heightened global risks and the limited ability for monetary policy to respond to an increasing economic slowdown warranted caution. FOMC board members noted there is still scope to increase interest rates twice through the remainder of 2016 yet they gave little guidance as to the timing of such moves and failed to excite investors to amend bets on the current path of policy. The Euro moved back through 1.14 touching intraday highs at 1.1429 as attentions now turn to ECB president Mario Draghi as he addresses economic and financial stability throughout Europe following the release of the ECB’s latest meeting accounts. A dovish undertone may force some Euro downside, however such moves could be quickly countered on commentary from Fed Chair Janet Yellen. Another dovish showing will likely further extend interest rate expectations and promote further USD weakness.