Australian Dollar:
The Australian dollar rally continued throughout domestic trade on Wednesday moving comfortably through 0.7250. Buoyed by comments from RBA governor Glenn Stevens wherein the Central Bank Chief suggested interest rates would remain on hold into the foreseeable future as the board adopted a wait and see approach the AUD touched intraday highs at 0.7282. Despite a decline in global commodities and increasing geopolitical tensions between Russia and Turkey the AUD held up well against a Greenback rally relinquishing only some of the day’s advances throughout overnight trade. The Aussie touched lows at 0.7230 before edging higher into the close recouping 0.7250 and opens this morning buying 0.7255 U.S cents. Attentions turn domestically to private capital expenditure as a marker for quarterly economic health with volatility risks plaguing markets into the weekend as US investors enjoy Thanksgiving celebrations ensuring trading volumes remain thin.
We expect a range today of 0.7150 – 0.7320
New Zealand Dollar:
The New Zealand enjoyed a mixed session through trade on Wednesday bouncing about within a 30 point range driven by offshore markers. Having rallied throughout the domestic session the Kiwi touched intraday highs at 0.6580 before a greenback rally prompted by diverging European and US policy expectations fuelled a move lower and the NZD touched 0.6550. The correction looked to be firming as US data sets supported a December policy amendment however an unexpected dip in Consumer sentiment compounded yesterday consumer confidence decline and highlighted suggestions a December policy adjustment is far from a sure thing. The Kiwi moved higher again touching 0.6580 and opens this morning only marginally lower buying 0.6574 U.S cents.
We expect a range today of 0.6510 – 0.6610
Great British Pound:
The Great British Pound crept upward throughout trade on Wednesday having found support on approaches 1.50 and 6 month lows. The GBP remains vulnerable to diverging monetary policy expectations a position highlighted earlier in the week following the quarterly inflation report wherein investors pushed back expectations of a policy adjustment. Having bounced of technical supports at 1.5085 and 1.5060 Sterling moved back through 1.51 touching intraday highs at 1.5134. We expect Cable to maintain recent ranges into the Fed meeting on December 16th with a policy adjustment from the FOMC likely to test the psychological 1.50 and deeper moves toward 1.4850.
We expect a range today of 2.0720 – 2.1020
Majors:
The Greenback rallied through trade on Wednesday touching 7 month highs against the Euro and recouping losses suffered against the Yen following a raft of strong and stable economic data sets. Upbeat manufacturing output, an unexpected increase in durable goods ordered and a larger than expected decline in weekly unemployment claims helped bolster calls for a December interest rate adjustment. The positive data flows buoyed confidence and added substance to USD longs and bullish bets as we move ever closer to the all-important Fed and FOMC policy meeting. The Euro moved through the psychological 1.06 barrier touching intraday lows at 1.0565 before support kicked in and helped the 19 nation unit pare losses into the close. Market focus has turned to next week’s ECB policy meeting wherein it is largely anticipated the Bank will announce the introduction of additional easing measures aimed at bolstering European inflation and growth. Having priced in deeper cuts to negative depo rates or an expansion in the bond buying program analyst are eying fresh EURO lows and a move toward 1.0550 and April lows at 1.0450 as the gap between US and European monetary policy widens. With trading expected to be thin as US markets enjoy Thanksgiving festivities geopolitical tensions may prompt volatility into the end of the week.
Data releases:
AUD: Private Capital Expenditure q/q
NZD: Trade Balance
JPY: No Data
GBP: No Data
EUR: M3 Money Supply, Private Loans and GFK German Consumer Climate
USD: No Data – Thanks Giving