Australian Dollar
Expected Range 0.7350 – 0.7460
Sending the Australian Dollar on a direct route higher overnight the world’s reserve currency has been sold heavily following a decision by the US Federal Reserve to once again keep official interest rate settings on hold during the month of June. Racing to an eventual high just shy of the 74.50 US Cents mark, investors have become not only sceptical however also frustrated by lack of the conviction displayed by US policy makers. In what’s been a dramatic 24 hour window the Australian dollar opens significantly stronger as it currently buys 74.07 US Cents. Having temporarily sidelined Brexit fears further volatility lies directly in the Aussies path once again this morning ahead of a monthly labour market report which has become increasingly difficult to forecast.
New Zealand Dollar
Expected Range 0. 6970 – 0.7080
Trading back up above the 70 US Cents handle overnight a distinct fall in the value of the US Dollar has greatly assisted the Kiwi following a unanimous decision by US Policy makers to keep monetary policy settings unchanged. Whilst median forecasts still suggest we are most likely to see two quarter point hikes before the end of the year the number of officials who only see one hike jumped from one to six. Reaching an eventual high of 0.7070 when valued against its US Counterpart, further support has been given to the New Zealand dollar after dairy product prices held steady at the latest Global Dairy Trade Auction. In what’s likely to dictate price activity this morning investors will be looking towards a quarterly GDP print ahead of further offshore Central Bank meetings this evening. This morning the New Zealand dollar buys 70.33 US Cents.
Great British Pound
Expected Range 1.9020 – 1.9420
The Great British Pound edged higher through trade on Wednesday reversing the recent downward spiral and climbing back through 1.42 following the U.S Federal Reserve’s distinctly dovish monetary policy statement. Additional support came from updated opinion polls with betting odds placing the implied probability Britons would elect to remain within the EU had climbed to 62% from 55% on Tuesday. As the vote looms ever closer we can expect increased volatility and wider position taking as investors scramble to protect themselves against the possibility of a Brexit. With attentions largely distracted by political queues direction through Thursday will find influence in macroeconomic indicators as the MPC hands delivers its monthly rate and asset purchase facility announcements.
Majors
Expected Range N/A
The U.S Dollar fell against the majority of major currency counterparts through trade on Wednesday after the Federal Reserve’s Open market Committee elected to leave interest rates on hold. Investors had largely priced in the decision and attentions turned to the accompanying rate statement and growth forecasts as markers for future policy moves. Fed Chair Janet Yellen and the board adopted a distinctly dovish tone lowering 2016 and 2017 growth forecasts while revising down the pace of interest rate increases. The FOMC signalled it still planned to raise rates twice through the end of the year however the board was distinctly divided with 6 of the 17 voting members suggesting just 1 hike would be appropriate. The Greenback tumbled against the Yen touching its lowest level in more than two years while the Euro neared 1.13 touching intraday highs at 1.1292. With investors now pushing back Interest rate expectations through July and lowering forecast for September the market turns its attention to next week’s Brexit vote. Should Britons elect to leave the EU we can expect considerable Euro volatility and immediate weakness as fears surrounding the wider growth story and strength of the EU could prompt calls for further stimulus measures.