Australian Dollar:
Providing further evidence that growth is stabilising, China’s exports rose for the first time in four months during June, figures released yesterday revealed. Whilst imports dropped by 6.7 percent, the net effect was a smaller trade surplus. Providing support for the Australian dollar China’s stock market also notched up its third consecutive day worth of gains, calming fears that the recent rout would have longer-term implications for confidence and ultimately consumption. Despite reaching a high of 0.7468 when valued against its US Counterpart the Australian dollar has struggled to maintain earlier gains opening steady this morning at a rate of 0.7409.
We expect a range today of 0.7370 – 0.7460
New Zealand Dollar:
The New Zealand dollar remains steady when valued against its Counterpart this morning, opening in a familiar territory at a rate of 0.6691. During a session which has generally favoured the worlds reserve currency, the US dollar has benefitted off the back of a proposed Greek debt package which if enacted should see Greece receive as much as 86 billion euros over the next three years in exchange for a wide range of domestic reforms. Whilst potentially eliminating one of the hurdles to raising US interest rates, the domestic challenges in Greece will be closely monitored over the coming days. In the absence of any local developments today, news flows from China tomorrow remain set to drive the Kiwi’s short-term direction
We expect a range today of 0.6650 – 0.6750
Great British Pound:
The Great British Pound has treaded water during the early parts of this week, struggling to keep pace with a broadly stronger US Dollar. Whilst the Sterling has lacked conviction Greek headlines have dominated forex moves overnight, with the initial gloss of a debt agreement wearing thin this morning as the market digests the difficulties surrounding a domestic sign off. Opening weaker against the US dollar at a rate of 1.5484 the Sterling is only marginally stronger when valued against the Aussie (2.0889) and the Kiwi (2.3133).
We expect a range today of 2.0830 – 2.0950
Majors:
The focus has very much been on Greece during the early parts of this week with months of talks finally ending in a debt deal being struck overnight. With marathon talks in Brussels resulting in Greece accepting similar terms to their first bailout in 2010, the road ahead still remains a long one given it may prove difficult for the Tsipras government to pass through parliament the tough measures agreed to with European creditors. Providing a rationale as to why the market’s reaction hasn’t been more positive, Greece has essentially surrendered much of its sovereignty to outside supervision a result likely to anger not only members of this own government but also the people who only last week voted unanimously against further austerity. Whilst doubts have already emerged over Tsipras ability to hold his government together, investors are once again being asked to sit tight. Rallying to a high overnight of 1.1196, the euro has traded in a wide 200 basis point range, opening in a familiar position of 1.0997.
Data releases
AUD: NAB Business Confidence
NZD: No data today
JPY: No data today
GBP: CPI y/y, PPI Input m/m, Inflation Report Hearing, BOE Gov Carney Speaks
EUR: German ZEW Economic Sentiment,
USD: Core retail sales m/m,
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