Australian Dollar
Expected Range 0.7410 – 0.7490
Trading immediately lower in the wake of minutes from the RBA’s March board meeting which saw the Central Bank strike a slightly more dovish tone, policy makers remain cautious over what the markets most recent bout of volatility means. Whilst the change in underlying language was very mild observers have interpreted the statement as being more open to future interest rate cuts, particularly in the presence of low inflation. Falling to an overnight low of 0.7445 when valued against its US Counterpart, weaker commodity prices have also significantly contributed to the Aussies woes. Opening weaker at a rate of 0.7454 all eyes will be on the FOMC this evening.
New Zealand Dollar
Expected Range 0.6560 – 0.6660
Extending its slide into a sixth day and continuing to erase the gains off the back of its recent record spike, the price of iron slumped overnight as did US Crude along with a handful other major commodities. In what’s been a disappointing trading window for the Kiwi, the New Zealand dollar has traded lower versus its US Counterpart overnight, a move driven mainly by the weaker commodity complex. With the Greenback remaining firm a disappointing world dairy trade auction has also had a softening impact on the Kiwi with the New Zealand dollar opening one percent lower this morning at a rate of 0.6604. On the horizon today investors will be looking towards the release of current figures shortly ahead of the resumption of the Federal Reserve’s two day meeting tonight.
Great British Pound
Expected Range 1.8950 – 1.9040
The Great British Pound has been well and truly on the defensive over the past 24 hours, slumping to an overnight low of 1.4188 when valued against its US Counterpart. Breaking down key resistance levels on its way south investors have chosen to short the Sterling in the lead up to this evening’s employment report and subsequent budget statement. Struggling to find support in an environment favouring the world’s reserve currency there has been very little respite for the Sterling this week as investors look towards what’s hoped will be an optimistic data set tonight. Opening weaker versus the Greenback at a rate of 1.4157 the Sterling is lower also versus the Aussie (1.8993) whilst stronger against the Kiwi (2.1428).
Majors
Expected Range N/A
The Dollar Spot Index which tracks the performance of the world’s reserve currency against 10 of its major peers has held its ground during the early parts of this week. With commodity linked currencies the worst performers overnight the US dollar has remained firm as policy makers began their two day meeting in Washington overnight. With the euro and yen both generally flat, there is no discounting just how much emphasis is being placed on the current meeting which is presently underway. Whilst policy makers are not expected to surprise the market with any shock interest rate hike, there has been some renewed optimism surrounding the world’s largest economy over the past month particularly in light of smoother flows from offshore. In what’s set to be a two-day period dictated by Central Bank rhetoric, given the BOE is also meeting on Thursday, any positive sentiment from the FOMC this evening is likely to be US dollar supportive.