Australian Dollar
Expected Range 0.7320– 0.7520
The Australian dollar moved lower through trade on Wednesday suffering its second consecutive daily depreciation. Touching intraday lows at 0.7456 the market and traders are scrambling to adjust positions and betting the RBA will cut interest rates next month should inflation fall below target. Tuesday’s Reserve Bank meeting minutes highlighted the importance placed on inflationary pressures by the Board and with CPI expected to fall below the RBA’s 2-3 percent target band there is a heightening expectation rates will fall at least once before the year is out. The Aussie having broken through the psychological 0.75 handle is poised to test technical supports at 0.7450. Should the downward break continue there is scope for the AUD to consolidate losses and extend a bearish run toward 0.7320. With little macroeconomic data on hand through trade today attentions will turn offshore to the ECB’s monthly rate announcement and key U.S manufacturing data for direction.
New Zealand Dollar
Expected Range 0.6830 – 0.7080
The New Zealand dollar gapped lower on open this morning following an economic outlook update from the RBNZ. The Central bank announced it expects to maintain an accommodative monetary policy platform highlighting the need for a decline in the exchange rate as the inflated currency holds down inflation and demand for tradeable goods. Breaking below 0.70 the NZD currently buys 0.6959 U.S Cents and is continuing to break lower at time of writing.
Great British Pound
Expected Range 1.7420 – 1.8020
The Great British Pound recouped much of the week’s earlier losses rallying throughout trade on Wednesday. Stronger than anticipated labour market data and a Bank of England survey suggesting there is yet to be any clear evidence of a post Brexit slowdown buoyed analyst confidence. The upbeat survey and data print suggest the BoE has some wiggle room in which to move and the immediate push to cut interest rates has lessened. Touching intraday highs at 1.3249 attentions now turn to retail sales and public sector borrowing for insights into how the Brexit decision has impacted consumer demand.
Majors
Expected Range N/A
The US Dollar continued its upward push through trade on Wednesday making fresh four month highs on ever increasing expectations the Fed will lift rates before the end of the year. Analysts have adjusted to the post Brexit environment and amended rate outlooks following a string of stronger than anticipated macroeconomic indicators across both labour markets and inflationary tools. Fed Funds Futures suggest there is a near 50-50 chance for policy change come December and investors will be keenly attuned to next weeks Fed and FOMC policy meeting for guidance and direction. Having moved through 107 JPY and 1.0990 EUR the Greenback index touched highs not seen since March. The Euro remained flat as markets prepare for today’s policy announcement and press conference. While there is an overwhelming expectation the ECB will maintain its current policy platform there is certainly scope for additional easing and a dovish bias is expected. The JPY suffered a heavy sell off as investors amend positions ahead of next week’s BoJ policy meeting, wherein it is expected the Central bank will introduce new stimulus measures. Attentions today turn to the ECB and U.S macroeconomic data sets for direction into the end of the week.