Australian Dollar:
Having dropped to a late afternoon low of 0.7349 when valued against its US Counterpart the Australian dollar opens steady this morning following news that the European Central Bank would move to re-open funding for Greek banks after an earlier vote showed the Greek PM had won parliamentary support. Having a positive bearing on broader risk flows the Australian dollar has also been forced to contend with a stronger Greenback overnight, a move triggered in the wake of improved macro signals. Opening steady this morning, the Australian is currently clinging to the 74 US Cents handle.
We expect a range today of 0.7340 – 0.7440
New Zealand Dollar:
The bearish trend continued through trade on Thursday and investors continued to dump the New Zealand dollar on expectations the US Federal Reserve will soon look to tighten monetary policy. Domestic data failed to add support to the embattled Kiwi as quarterly CPI reports failed to meet market expectations forcing the dollar through 0.6550. Opening this morning buying 0.6516 the Kiwi seems to have found support on approaches to 0.65 but a heavy US docket could prompt a deeper selloff should strong prints add to calls for a September rate adjustment.
We expect a range today of 0.6420 – 0.6580
Great British Pound:
Sterling edged marginally lower through trade on Thursday as investors looked to the US Federal Reserve and an unexpected dip in unemployment claims in anticipating a rate adjustment as early as September. The world’s base currency strengthened across the board while the Great British Pound found support against most major counterparts as investors continued to revel in BoE governor Mark Carney’s suggestion interest rates could start to rise before the end of the year. The hint toward tighter monetary policy highlights the divergence in policy outlooks and the GBP rallied against the Euro. With little on the domestic docket through trade today direction into the close will come from US data sets.
We expect a range today of 2.1000 – 2.1250
Majors:
The Greenback advance continued through trade on Thursday as markets reposition themselves in anticipation of a Federal Reserve rate hike. An unexpected fall in the number of unemployment claims added support to comments from Janet Yellen, wherein, the Fed Chair re-affirmed the Central Banks stance signalling an upward rate adjustment would be issued before years end. Touching two month highs the dollar index rallied strongly as the Greenback edged higher across the board. The Euro found brief support when Tsipras and his divided Syriza party found the opposition numbers needed to pass a bailout Bill packed with austerity reforms. In passing the Bill the government opened Greece up to a fresh tranche of bailout funding and Emergency Lending Assistance from European creditors eliminating the immediate threat of default and we expect banks will re-open on Monday, albeit with extensive capital controls still in place. Greece has remained the primary market focus off late and this week’s approval of austerity measures and injection of bailout funding allows the spot light to shift back toward the underlying economic fundamentals. With attentions turning toward yield expectations and returns the Greenback pushed the 19 nation unit lower and through 1.09 to open today at 1.0877. With little macroeconomic data on hand the Euro remains at the mercy of ongoing debt negotiations with German lawmakers set to accept ongoing Greek debt support while the US docket is crowded with key CPI and Consumer sentiment reports marshalling direction into the weekly close.
Data releases:
AUD: CB Leading Index
NZD: No data
JPY: No Data
GBP: No Data
EUR: No Data
USD: Building Permits, CPI m/m, Core CPI m/m, Housing Starts, Prelim UoM Consumer Sentiment and FOMC Member Fischer Speaks.