Australian Dollar:
Beating estimates a labour market report yesterday showed the Australian economy added 7300 new jobs last month. Whilst the official unemployment rate increased to 6 percent in June following a revised result of 5.9 percent in May, demand for the Australian dollar jumped after the announcement rising to an intraday high of 0.7491. With the price of iron ore rallying strongly overnight upside gains at least for the time being appear limited as market participants continue to sit on their hands in the lead up to Greece’s final debt deadline this Sunday. Opening only marginally stronger the Australian dollar currently buys 74.45 US Cents.
We expect a range today of 0.7400 – 0.7490
New Zealand Dollar:
Risk sentiment has notably improved over the past 24 hours following a bounce in Chinese equities with the price of iron ore also jumping back up close to the $US50 a tonne mark. During a week dominated by offshore developments its likely to be a similar story for the New Zealand dollar today as investors wait on a speech over the economic outlook by US Federal Reserve Chair Janet Yellen this evening. Opening this morning steady at a rate of 0.6739 when valued against its US Counterpart, resistance is likely to kick to in closer the 68 US Cents handle with Greek developments still maintaining significant headspace.
We expect a range today of 0.6700 – 0.6780
Great British Pound:
The Bank of England kept interest rates at a record low of 0.5 percent once again overnight, in a sign that policy makers are starting to grapple with a higher wage push in the face of renewed global certainty. Whilst policy makers still remain on track to lift interest rates over the coming quarters, it’s the external uncertainty which remains difficult to price in. Stronger against the US Dollar this morning at a rate of 1.5379, the Sterling is also stronger against the New Zealand dollar (2.2811) whilst lower against the Aussie (2.0646)
We expect a range today of 2.0580 – 2.0720
Majors:
News flows have been predominantly positive overnight with broader indicators of risk allowing improved liquidity and greater participation. With Greece’s new finance minister being credited for the creation of renewed optimism, the Greek government has now submitted a reformed proposal to its European creditors. In a move intended to avoid bankruptcy, markets are now awaiting an assessment of Greece’s latest submission in the hope a deal can be struck, the deadline is Sunday. Marginally weaker upon this morning at a rate of 1.1035, support has held up well around the 1.10 mark, a precedent which could be broken if outcomes aren’t delivered. In other developments broader equity markets and commodities have been choppy this week with policy makers in China keen to see a period of stability following heavy losses over the past three weeks. Steady against a handful of major pairs the Greenbacks value remains at the mercy of risk flows ahead of comments from Janet Yellen this evening.
Data releases
AUD: No data today
NZD: Trade Balance
JPY: Household Spending y/y, Tokya Core CPI y/y
GBP: No data today
EUR: Private Loans y/y, EU Economic Sentiment
USD: Revised UoM Consumer Sentiment
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