Australian Dollar
Expected Range 0.7480 – 0.7680
The Australian dollar edged higher through trade on Thursday buoyed by the Bank of England’s aggressive new stimulus package. Having crept back through 0.76 throughout domestic trade the AUD shrugged off softer than expected retail sales climbing to intraday highs at 0.7640. The massive stimulus program introduced by the BoE overnight helped fuel demand for the AUD as a higher yielding asset. While the RBA’s rate cut pushed interest rates to record lows the Aussie dollar still remains an attractive carry trade and yield play in an environment of extraordinarily low global yields. Buying 0.7627 U.S cents at time of writing attentions now turn to the RBA’s monthly monetary policy statement and U.S non-farm payroll numbers. A poor print could see the AUD test resistance at 0.7650 pushing higher into the weekend while the promise of further rate cuts could take the gloss of Aussies recent rally.
New Zealand Dollar
Expected Range 0.7080 – 0.7280
The New Zealand dollar edged upward through trade on Thursday as investors chased a higher yield return following the Bank of England’s rate cut and introduction of an aggressive new stimulus package. The NZD moved back through 0.7150 touching intraday highs at 0.7201 before investors squared positions into the daily close. Buying 0.7173 U.S cents at time of writing attentions turn to today’s main market event, U.S non-farm payroll numbers, ahead of next week’s RBNZ rate announcement and monetary policy statement.
Great British Pound
Expected Range 1.6980 – 1.7480
The Great British Pound suffered a heavy sell off through trade on Thursday following the Bank of England’s (BoE) decision to cut interest rates to record lows and introduce an aggressive new stimulus program. Sterling plummeted as Bank of England Governor Mark Carney outlined the Committee’s massive stimulus package set to test the limits of monetary policy. Having cut interest rates to 0.25% the BoE announced a spending plan across two key schemes designed to ensure Banks maintain low interest rates while promoting lending and driving consumer spending. Relinquishing some 250 points cable collapsed touching intraday lows at 1.3104 and with the BoE signalling additional rate adjustments before the end of the year there is room and scope for moves toward the post Brexit lows at 1.2795. Attentions today turn to US non-farm payroll numbers as the key directional driver into the weekend.
Majors
Expected Range N/A
The U.S Dollar Index edged higher through trade on Thursday buoyed by the BoE’s aggressive new stimulus platform. The second straight daily appreciation saw investors reversing the weeks early losses and squaring positions ahead of today’s all important non-farm payroll print. Softer than anticipated GDP and inflationary pressures have flagged concerns surrounding the pace and timing of future fed rate increases with 88% of investor’s now pricing in maintenance of the status quo when the Fed meets next in September. Thus, attentions will be directly focused on today’s labour market data as a key indicator and marker of wider economic health. Jobs numbers have long been on track with Fed guidelines while domestic and global uncertainty have restricted growth and forced a lag across both inflation and GDP. A strong read today and again in September could promote renewed optimism across markets and ensure a rate adjustment is considered before years end. Holding above 101 JPY and 1.1155 Euro the USD could test new lows if today’s data fails to meet market expectations.