Australian Dollar
Expected Range 0.7380 – 0.7580
The Australian Dollar crept higher through trade on Wednesday buoyed by increasing risk appetite as Brexit fears begin to subside. Opinion polls and bookmaker odds continue to suggest Britons will opt to remain within the EU boosting demand for higher yielding returns and allowing the Aussie dollar to power through 0.75 U.S cents. Touching intraday highs at 0.7523, a level not seen since May 3rd, the AUD took advantage of improving investor sentiment and wider volatility with traded volumes somewhat lower than normal as analysts and traders sit back and wait for a definitive outcome to Britain’s EU membership vote. With all eyes on the UK today the AUD will take directional queues from risk appetite trends. A ‘stay’ vote could prompt another risk appetite rally and push the AUD higher still while an ‘out’ majority will signal a definitive shift to risk off trade and a quick commodity currency sell off.
New Zealand Dollar
Expected Range 0.7100 – 0.7200
Much like its antipodean counterpart the New Zealand dollar found support through trade on Wednesday as investor fears surrounding the upcoming Brexit vote continued to ease. The Kiwi rallied strongly touching 2 weeks highs at 0.7186 as investors, buoyed by expectations Britons will opt to remain within the EU, chased a higher yield return. The Kiwi has enjoyed a remarkable rally through the last month and as risk appetite holds there is room for further upside potential and a break above 0.72 U.S cents. Attentions now turn to today’s EU membership vote as the single driving force behind direction.
Great British Pound
Expected Range 1.8780 – 2.0480
The Great British Pound jumped higher through trade on Wednesday as opinion polls and bookmaker odds suggested Britons would opt to remain within the European Union. Demand for risk improved throughout the final day of campaigning as the number of investors fearing a Brexit and wider disruption to global financial stability fell and Sterling touched intraday highs at 1.4760. The Brexit debate remains the sole factor driving GBP direction at present and with traded volumes lower as some investors sit on the sidelines ahead of today’s referendum there is plenty of scope for wider volatility as votes are counted. Should leave campaigners win the popular vote then there is scope for a 10% -20% downward correction while the upside potential should Britons opt to remain within the EU is less dramatic, however a shift toward and through 1.50 is possible.
Majors
Expected Range N/A
The U.S dollar edged lower through trade on Wednesday suffering losses against a broad basket of major counterparts as demand for risk improved. Moving broadly lower the Greenback suffered as bookmakers and opinion polls suggest Britons will opt for EU membership in today’s Brexit vote reducing fears of widespread financial disruptions and a drag on global growth prospects. Fed Chair Janet Yellen then proceeded to add salt into the proverbial wound adopting a dovish tone in a market address. The conservative assessment was seen a confirmation the Fed is unlikely to amend interest rates in the near future and investors again pushed back expectations surrounding the timing of a second IR increase. Fed Funds Futures, an indicator of market expectations surrounding monetary policy, fell to 9.5% in July and 26% for September a strong indication the market is pricing in a prolonged period of cheap money. Having fallen to intraday lows below 104.50 against the Yen and allowing the Euro to move back through 1.1300 attentions now turn to today’s British referendum for risk appetite and directional flows.