Australian Dollar:
Sitting behind a subtle upward shift for the AUD intraday yesterday, inflation results in China for the month of November picked up, with CPI rising at an annualised pace of 1.5 percent from a year earlier. Trading to a 24 hour high of 0.7245 when valued against its US Counterpart, the Australian dollars upward path was relatively short lived with offshore weakness the biggest contributor to its latest fall. Opening almost unchanged this morning at a rate of 0.7213 direction today remains set to be largely dictated by Novembers labour market report, where it’s expected a slight pull-back may have transpired in the wake of Octobers large leap forward.
We expect a range today of 0.7170 – 0.7250
New Zealand Dollar:
Off the back of a relatively quiet 24 hour window, the New Zealand dollar came to life during the early parts of this morning’s session after the RBNZ cut its official cash rate by 25 basis points to a record low of 2.5 percent. Circulating below the 0.6650 handle when valued against its US Counterpart for much of yesterday’s session, half a cent worth of gains have been recorded this morning as the kiwi opens stronger at 0.6720. Stating that growth and employment conditions had softened during 2015, it’s also expected inflation will move back in between the banks 1-3 percent target over the coming 12 months. In what’s an interesting currency reaction to this morning’s downward adjustment, their remains some optimism that interest rates setting at least in the near-term will shift towards a more neutral position.
We expect a range today of 0.6680 – 0.6770
Great British Pound:
The Great British Pound has recorded some impressive gains when valued against its US Counterpart overnight, reaching an eventual high of 1.5191. Bouncing back strongly from lows witnessed earlier in the week below the 1.5000 handle, near-term direction appears clouded with positioning in the lead up to this evening BOE monetary policy statement likely to favour a somewhat cautious approach as policy makers look to push back the timeframe for higher rates given the environment of below par growth and non-existent inflation. Opening stronger across this morning, the Sterling is stronger versus the Greenback (1.5169), the Aussie (2.1029) and the Kiwi (2.2819).
We expect a range today of 2.0960 – 2.180
Majors:
Having risen by as much as 4 percent during early session trade, oils brief rally has all but fizzed upon open this morning with further falls across global equity markets indicative of the high level of uncertainty surrounding the current global economic framework. Suggesting prices are now likely to drift sideways in the lead up to next week’s US Federal Reserve meeting, concerns over China’s slowing economy also remain prevalent, as tumbling commodity prices sit at the forefront of weaker demand. In the absence of any headline releases overnight, volumes across forex markets were surprising strong with a notably lower Greenback at the forefront of those moves. Opening lower against the Yen this morning at a rate of 121.75, the euro relished the opportunity to stretch its leg opening stronger at 1.1029. Whilst this evening’s session isn’t likely to offer too many surprises, investors remain geared for a big end to the week in light of handful of key releases from the United States on Friday.
Data releases
AUD: Unemployment Rate, MI Inflation Expectations
NZD: RBNZ Rate Statement
JPY: BSI Manufacturing Index
GBP: MPC Official Bank Rate, Monetary Policy Summary
EUR: No data today
USD: Unemployment claims
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