Australian Dollar
Expected Range 0.6950 – 0.7050
The Australian dollar has continued to fall and fall hard over the past 24 hours, suffering now its worst start to a year in over two decades. Tumbling to a low of 0.6981 when valued against its US Counterpart, the Australian dollar has now lost more than four percent since the 31st of December as the heightened level of worry over China’s stock market continues to create disruptive waves for the rest of the world. Overshadowing a smaller than expected trade balance deficit, it’s difficult to find any pocket of the world economy this morning that hasn’t been consumed by China’ market volatility. Opening weaker this morning clinging to the 70 US Cents handle, stretching beyond the obvious risks to broader sentiment measures today, investors will also be closely watching this evening’s labour market report from the United States
New Zealand Dollar
Expected Range 0.6590 – 0.6660
Benchmarks throughout the region continued their nosedive yesterday as China once again halted trade. Given the gradual withdrawal of measures previously designed to limit short-selling, policy makers continue to grapple with ways to provide a more stable platform with many participants questioning the fairness of an automated market closer once losses reach seven percent. Whilst macro conditions haven’t changed greatly this week, broader sell signs have been driven by fear with the herd effect accountable for large equity and currency losses across the board. Whilst still a long way from its opening level of 0.6820 on Monday, the New Zealand dollars value has stabilised somewhat over the past 24 hours. Opening only marginally weaker the New Zealand dollar currently swaps hands at a rate of 0.6629 when valued against its US Counterpart.
Great British Pound
Expected Range 2.0850 – 2.0940
Dipping to a fresh low of 1.4533 when valued against its US Counterpart, initial weakness came off the back of the markets preference to hold traditional safe havens amid ongoing signs of volatility originating out of China. Rebounding to post a 24 hour high of 1.4640 a report which showed house prices rose by an average of 1.6 percent during the final three months of 2016 went some way to stabilise a somewhat shaky looking backdrop. With the focus very much lying within the Asian circle, inflationary reads from China over the weekend will be critical as will tonight’s employment reading from the United States. Slightly lower when valued against the Greenback (1.4617), the Sterling is steady against the Kiwi (2.2044) whilst stronger versus the Aussie (2.0895).
Majors
Expected Range N/A
With Beijing accelerating the yuan’s depreciation as part of efforts to make exports more competitive, officials were once again forced to halt trading on China’s stock market, the second of such moves this week. Triggering an automated suspension of trade when losses reach seven percent, another brutal selloff during the Asian session has compounded the woes for those currencies highly linked to broader measures of sentiment. With the AUD, NZD and CAD all falling, typical of such conditions the yen rallied hard, with the USD/JPY now sitting at 117.50 (well down from the highs above 120.40 witnessed earlier in week). With global stocks following China’s lead, oil has also continued its relentless slide. Amongst the nerviness which still defines markets there has been a few bright spots overnight with the euro bucking its downward trend. Gaining more than one and a half cents when