Australian Dollar:
It’s been another bumpy ride for the Australian dollar over the past 24 hours despite cooling concerns over China’s attempts to devalue the Yuan. Unable to hold onto gains when valued up above the 74 US Cents handle, US retail sales which matched the consensus forecast proved to be broadly US dollar supportive during the overnight session. Opening marginally weaker this morning at a rate of 0.7357 when valued against its US Counterpart, the RBA’s deputy governor Christopher Kent is delivering a speech in Brisbane this morning titled “Recent Labour Market Developments” ahead of another round of US macro releases this evening.
We expect a range today of 0.7300 – 0.7410
New Zealand Dollar:
Volatility levels stabilised yesterday following comments by the PBOC who stated that there is no basis for a further depreciation in the yuan currency. Whilst the yuan managed to fall for third consecutive day, market jitters have broadly reseeded on the view this week’s depreciations were a one off, part of a larger shift towards a more market driven exchange rate. Maintaining its value for the majority of yesterday’s intraday session, Kiwi losses have been notched up overnight off the back of a notably stronger greenback. Opening half a cent lower this morning the New Zealand dollar currently buys 65.71 US Cents.
We expect a range today of 0.6530 – 0.6630
Great British Pound:
Resistance around the 1.5630 mark when valued against its US Counterpart once again remained intact overnight. With the Sterling’s value stabilising, upside moves over the past 24 hours have been very limited on increased US Fed rate bets. Keeping in mind sentiment has remained generally positive the Great British Pound is going to need a notable hand to assist in its next possible leg up, assistance which could come next week off the back of CPI and Retail Sales numbers. Opening steady against the Greenback at 1.5609, the Sterling is stronger against both the Australian dollar (2.1209) and the New Zealand dollar (2.3742).
We expect a range today of 2.1120 – 2.1290
Majors:
US Stocks finished flat on Thursday as the price of US crude oil slumped to its lowest level in over six years. Despite energy shares which remain under pressure, in a positive note for the world’s largest economy, US retail sales rose in July, supporting the view that the US Federal Reserve could raise interest rates as early as next month. Whilst forex markets are still digesting China’s currency devaluation, flows overnight were much more closely aligned to expectations surrounding US Fed Policy. With US retail sales rising by a solid 0.6 percent last month, weekly unemployment claims rose marginally. In a theme likely to remain in place through to weeks end investors will be keeping a close eye on PPI, Industrial production and consumer sentiment reads due for release from the United States tonight. This morning the Greenback is stronger against both the Euro (1.1151) and the Yen (124.42).
Data releases
AUD: RBA Assist Gov Kent Speaks
NZD: Retails Sales q/q, Core Retail Sales q/q
JPY: No data today
GBP: No data today
EUR: Final CPI y/y, Flash GDP q/q, Eurogroup Meetings
USD: PPI m/m, Core PPI m/m, Capacity Utilisation Rate, Industrial Production m/m, Prelim UoM Consumer Sentiment
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