Australian Dollar:
The Australian Dollar remained range bound on Friday as the RBA Monetary Policy statement release failed to stimulate any AUD price action. The RBA statement had an overall dovish tone and highlighted poor local business investment and waning Chinese growth to be contributing factors in leaving the possibility of another rate cut on the table. Furthermore Chinese trade balance data released on the Friday that came in just shy of expectations was shrugged off by the Australian dollar, having a relatively muted effect on the local currency. The Aussie reached intraday lows of AUD/USD of 0.7860, was countered by highs of 0.7968, and opens this morning buying 79.41 US cents. Today’s focus in local announcements will be on the monthly NAB business confidence figures which will show how domestic businesses rate the current economic conditions.
We expect a range today of 0.7900 – 0.7980
New Zealand Dollar:
The Kiwi opens much stronger this morning when compared to its US counterpart buying 74.87 US cents, as soft US employment data was released at the end of last week. Fridays Asian session did not provide any driving catalyst for the NZ dollar as the economic calendar was free of local announcements, however in overnight markets the local currency shot higher to levels of NZD/USD 0.7501 after on-farm payroll data revealed a drop in the number of employed people during the previous month. With another trading day free of any domestic figures scheduled for release, the Kiwi will once again look overseas for direction.
Great British Pound:
The Cable experienced a rather tumultuous trading session on Friday as disappointing local trade balance figures we announced in the UK, underlining a wider than expected goods deficit for the first quarter of 2015. The report showed that the deficit was currently at 10.122 billion pounds, which came in much wider than the expectation listed by economists of 9.8 billion pounds. This initial report sent the Pound trending downwards, however weak US employment data that was released later in the evening helped bring the Cable back to levels that were seen earlier in the trade session. The local currency opens this morning at GBP/USD1.5458, and investor attention today will be directed to the Bank of England’s official bank rate announcement, and the Monetary Policy Committees rate statement.
We expect a range today of GBP/AUD 1.9420 – 1.9500
Majors:
The EUR/USD opens lower this morning buying only 1.1192 US cents as Greece concerns continue to weight down on the EUR value. US employment figures released on Friday that trailed forecasts did see a brief spike in the EUR/USD, however anxiety surrounding the possibility of Greece defaulting on its debt and perhaps exiting the Euro proved too strong sending the EUR back down before the close of the session. All traders today will be paying close attention to the Euro group meetings where officials will attempt to secure funding for the troubled Euro member. Greece has been reported as remaining hopeful, however there are still several issues that need to be addressed, such as budget and labour/pension issues, before additional funding will be approved.
Data releases:
AUD: NAB Business Confidence
EUR: German WPI m/m, Eurogroup Meetings
GBP: Official Bank Rate, Asset Purchase Facility, MPC Rate Statement
USD: Labor Market Conditions