Australian Dollar
Expected Range 0.7010 – 0.7090
The Australian dollar has broken to the downside over the past 24 hours, reaching a low of 0.7050 when valued against its US Counterpart. Sparking the initial sell off which took the Aussie to its lowest level in over three weeks, the Peoples Bank of China surprised investors yesterday devaluing the Yuan by a further 0.22 percent. In a world which is clearly struggling to steady itself off the back of China’s push to prop up their economy through boosting exports, jitters this week have been there for all to see amid also further falls across key commodity markets. In what’s been another lively session the Australian dollar opens far from settled as it currently buys 70.58 US Cents.
New Zealand Dollar
Expected Range 0.6600 – 0.6680
The New Zealand dollar was hit hard when valued against its US Counterpart yesterday, well and truly caught up in the global rout which has seen investors pull funds firstly out of emerging pockets, followed by commodity linked units, back into traditional safe havens. Initiating the falls, further currency devaluations from China were later compounded by contagion elsewhere with global equity markets falling as did oil which hit fresh 12-year lows. Proving to be a troubled start to the New Year, currency flows have truly highlighted that the risk tap remains firmly in the off position. Having dropped to a low of 0.6626 when valued against its US Counterpart the New Zealand currently buys 66.42 US Cents
Great British Pound
Expected Range 2.0650 – 2.0780
There has been no escaping
the falls witnessed across several key asset classes globally this week with the
Great British once again struggling given the heightened fears surrounding the
health of the global economy. Despite figures overnight which showed Britain’s service
sector had stabilised during December, an overall improvement in activity fell
well short of what was needed to reverse the downward channel of the Sterling.
Opening weaker against the US dollar at a rate of 1.4633 the Sterling has
advanced nicely when compared to the Australian dollar (2.0717) and New Zealand
dollar (2.2042).
Majors
Expected Range N/A
US Stocks sunk, oil hit fresh lows and commodities
fell as investors fretted over fresh signs of weakness from the world’s second largest
economy. In a jam packed session, further currency depreciations from the POBC
clearly set investors off on the wrong foot as a monthly survey of service industries
slipped to a 17-month low. With investors clearly on edge, risk sentiment this
week has taken a battering, geopolitical tensions not helped once more by news
flows out of North Korea. In what would normally drive currency flows, macro releases
from the United States were broadly mixed with positive trade and employment data
outweighing a disappointing ISM non-manufacturing print. Whilst in the US,
minutes from the Fed’s last meeting, have been shared over the past few hours, revealing
Decembers decision to hike rates was much closer than many expected. Given the
fear driven moves overnight, no surprises to see both the Japanese Yen and US
dollar higher this morning. In the lead up to Fridays non-farm payroll report, stability
in China will be needed required first and foremost before the rest of the world
can get enjoy some more consistent price activity.