Australian Dollar
Expected Range 0.6910 – 0.7000
Opening a long way from the 73 US Cents mark which was witnessed during the early parts of last week, the Australian dollar traded as low as 0.6947 when valued against its US Counterpart on Friday. At the forefront and the main trigger for broader spikes in volatility last week, the continued deprecation of China’s Yuan as well as the two forced trading closures within Asia’s largest stock market, managed to send shocks across the globe sparking contagion selling which engulfed even the world’s deepest and safest pockets. In a sell-off dictated by fear, it’s hoped investors this week will be driven more by fundamental moves should price should activity calm within the worlds seconds largest economy. Opening lower this morning at a rate of 0.6949 when valued against its US Counterpart, the near-term hurdle for the Aussie will involve its efforts to recapture the 70 US Cents handle with employment numbers on Thursday appearing to be the domestic highlight.
New Zealand Dollar
Expected Range 0.6500 – 0.6580
The New Zealand dollar has tumbled over the course of the past five days in what’s very much been an environment void of any underlying risk-taking. Comfortably erasing what was an incredibly positive end to 2015, the New Year has bought with it a level of volatility many thought only China had the capacity to deliver with equity markets taking the brunt of those falls. Well off the highs of early last week the New Zealand dollar currently buys 65.41 US Cents. Whilst it’s hoped the coming 24 hour window should bring with it calmer waters, the moves of policy makers within China will once again be closely monitored.
Great British Pound
Expected Range 2.0820 – 2.0930
In what’s been an incredibly rocky start to 2016 the Great British Pound slumped to a fresh five and a half year low when valued against its US Counterpart on Friday. Falling for much of last week, growth concerns out of China amid a slump across key commodity markets heightens the risk that the Bank of England will struggle to raise interest rates at all during the coming 12 month window. Depreciating also versus the euro for a seventh consecutive week (it’s longest losing streak since April 2011) the Sterling looks distinctively under pressure this morning. Having reached a low of 1.4506 the Great British Pound opens weaker against the Greenback as it currently swaps hands at a rate of 1.4516.
Majors
Expected Range N/A
Proving to be an incredibly busy end to a dreadful week for markets, the S&P 500 retracted for five straight days, recording its worst start to a year since records began. In what’s resulted in an avalanche of selling, signs indicative of positive economic growth out of both the United States and the Eurozone were not enough to reverse the waves of negativity swelling from China. Amid the volatility positive growth signs included a US labour market report which showed employers added 292 000 new jobs during December whilst GDP across the Eurozone grew at an annualised pace of 1.6 percent during the final quarter of last year, its equal highest rate since 2010. With the euro zone showing signs of slowly awakening, interest rates settings and the expectations which surround them continue to remain on tenterhooks as a deteriorating outlook in China for the time being takes centre stage. During a week dominated by traditional safe haven flows, the Japanese Yen and the US dollar have been the key benefactors.