Australian Dollar
Expected Range 0.7510 – 0.7580
The Australian dollar continued its impressive upward run on Friday, completing a remarkable two-week window which saw the Aussie trade to its highest level in 11 months when valued against its US Counterpart. In what’s proved to be its biggest two week rally in four-and-half years, favourable risk flows and rebounding commodity prices have all spurred on investors, a move which has been further advanced by an aggressive monetary expansion announced by the ECB. Opening this morning notably stronger once again at a rate of 0.7557 there remains plenty on offer over the coming days with Monetary Policy minutes from the RBA’s March meeting tomorrow followed by a labour market report on Thursday, both earmarked as the domestic highlights.
New Zealand Dollar
Expected Range 0.6700 – 0.6790
Having slumped to a mid-week low of 0.6618 when valued against its US Counterpart following the RBNZ’s shock decision to cut the official benchmark cash rate on Thursday by 0.25 percent to 2.25 percent, the Kiwi has since done well to rebound assisted by favourable risk flows. In key benchmarks which measure global sentiment, year to date declines have almost been fully erased a stance greatly helped along by the supportive roles of both the POBC and ECB. Taking its turn this week risk flows are likely to be dictated by the Federal Reserve’s monetary policy statement which is set to be accompanied by an updated set of economic forecasts and economic projections. Opening in a stronger position that where we left it on Friday the Kiwi currently buys 67.42 US Cents.
Great British Pound
Expected Range 1.9000 – 1.9400
The Great British Pound has continued its slide against the AUD as investors look to move out of an uncertain situation. The discussion around whether or not the UK should leave the Eurozone continues to intensify and the markets are reacting nervously. The unexpected strength of side lobbying to leave the Eurozone will see the referendum hanging over the UK economy for some time as the vote is not taking place until June. The GBP opens down this morning up against the AUD (1.9071) and NZD (2.0851) but up against the USD (1.4222).
Majors
Expected Range N/A
Asian markets are set to open firmly in positive territory this morning following Friday’s moves which saw investors well and truly embrace the ECB’s most recent bout of monetary stimulus. Off the back of moves by the POBC to strengthen the Yuan’s fixing point, higher-yielding assets along with all commodity linked currencies have benefitted at the expense of more traditional havens. Highlighting the fact markets have been significantly calmer over the past three weeks, steady economic flows sees the spotlight remain firmly on the world’s largest central banks this week ahead of key meetings by the BOJ, BOE and US Federal Reserve. Opening marginally weaker against the euro at a rate of 1.1144 the Greenback is stronger against the Yen at 113.790. Whilst market participants aren’t expecting any interest rate adjustments from the US Federal Reserve this week it will be interesting to see whether there is a bridging of the gap between the existing dovish pricing of the market over the more bullish expectations by the Fed.