Australian Dollar:
The Australian Dollar opens this morning much higher against its US counterpart buying 78.54 US cents. The local currency treaded water around familiar levels yesterday without much movement, while overnight markets then saw the Aussie climb to highs of 0.7872 due to poor Services data being released out of the US. Furthermore, traders pushing out expectations for a future rate hike in the U.S have also contributed to the recent US sell-off across the board. Coming up in local economic announcements we have RBA Governor Stevens speaking at a banking and wealth summit in Sydney. Investors will be keeping a close eye on this public engagement for any subtle clues regarding future monetary policies.
We expect a range today of 0.7810 – 0.7890
New Zealand Dollar:
The Kiwi has rallied overnight due to speculation that the Federal Reserve in the US will not be raising rates anytime in the near future. The NZD/USD remained range bound yesterday while see lows of 0.7590 countered by highs of 0.7666. With no local economic releases scheduled today the NZ Dollar will again look overseas again for any driving price action. However, with trade balance and business confidence data being released tomorrow, and the RBNZ statement coming out on Thursday, the Kiwi is expected to sit on the fence while investors anxiously await these upcoming announcements.
Great British Pound:
After a rather lacklustre trading session during the day yesterday the Pound Sterling now finds itself stronger when compared to a handful of its major counterparts. The Cable opens this morning at 1.5232 after soft services data that trailed expectations were released along with commentators stating that an upcoming US rate hike is unexpected. All eyes will be on GDP figures being released later in the day for the 1st Quarter of 2015. With GDP being the broadest measure of economic activity this report will give an insight into the country’s economic health, and depending on what is reported will look to have have a significant impact on the Sterling.
We expect a range today of GBP/AUD 1.9350 – 1.9430
Majors:
The US dollar has fallen versus most G-10 currencies overnight in what has been a session dominated by thin flows. Whilst US Stocks also closed lower there is a sense already that investors have begun withdrawing their exposures in the lead up to Wednesday’s Federal Reserve Open Market Committee meeting. Highlighting just how important the Fed’s next meeting remains disappointing data flows over the past month have only underscored speculation that the headwinds to the US growth story are only becoming stronger. With the USD/JPY pair moving only slightly off the back of a credit downgrade in Japan there has been no signs of progress in Greece as it was hoped a slight reshuffle in the bailout teams may reduce tensions. With investors expecting much of the same over the coming 24 hour window, volumes and ranges are likely to increase ahead of a slew of central bank activity including the BOI, BOJ, RBNZ and US Federal Reserve.
Data releases:
AUD: RBA Gov Stevens Speaks, CB Leading Index m/m
CAD: BOC Gov Poloz Speaks
GBP: Prelim GDP q/q, BBA Mortgage Approvals, Index of Services 3m/3m
JPY: Retail Sales y/y
USD: S&P/CS Composite-20 HPI y/y, CB Consumer Confidence, Richmond Manufacturing Index