Australian Dollar
Expected Range 0.7280 – 0.7500
The Australian dollar edged lower throughout trade on Thursday as investors piled into haven assets and the U.S Dollar as commodity prices and global equities slumped across the board. Nervous traders seemed reluctant to advance the AUD through the psychological 0.75 handle forcing the Aussie to turn lower having touched intraday highs at 0.7504. The U.S Dollar has been pummelled through the week thus far, following last week’s dismal non-farm payroll print, and markets appeared to take stock through trade on Thursday. Investors pushed the dollar index off 5 week lows as comparisons across key Central Bank policy outlooks suggest the Fed is still the only headline unit considering upward interest rate adjustments. Volatility and direction will continue to follow Fed and RBA interest rate expectations and we maintain a bearish AUD outlook through the medium to longer term while short term topside support remains in place as the Fed and FOMC push back policy changes.
New Zealand Dollar
Expected Range 0.7020 – 0.7150
The New Zealand dollar surged to 12 month highs through trade on Thursday buoyed by a hawkish RBNZ. The Reserve Bank opted to leave the Overnight Cash Rate at 2.25% and suggested through its accompanying rate statement that modest improvements across commodities and global growth when coupled with concerns surrounding an Auckland housing bubble that there was scope to maintain the current policy platform through the near to medium term. The Kiwi rallied strongly touching intraday highs at 0.7147 before profit taking and a wider USD recovery rally forced the unit back toward the 0.71 handle.
Great British Pound
Expected Range 1.9350 – 1.9650
The Great British pound moved lower through trade on Thursday sold off on the back of a broad based USD rally and renewed concerns Britons will opt to leave the EU. Brexit chatter has dominated Sterling direction of late and recent polls suggest just 25% of the populace believe an exit will have a marked effect on living standards. The Ipsos Mori poll is a hammer blow to proponents of the EU suggesting a central maximum in their campaign is failing to hit home. Cable moved through 1.45 touching intraday lows at 1.4450. With the referendum looming ever closer Brexit talk will continue to dominate direction.
Majors
Expected Range N/A
The U.S Dollar advanced against a broad base of currency counterparts through trade on Friday as weakness across commodities, stocks and yields forced investors toward haven assets. The market appeared skittish as government yields moved lower heightening concerns surrounding a prolonged period of stagnated inflation and low or negative interest rates. The Greenback index rallied off five week lows finding further support in a stronger than expected return in weekly jobless claims and wholesale inventory sales. Macroeconomic indicators continue to suggest the U.S economic recovery is on track but at the same time there is still ample slack across labour markets and growth outlooks. Having edged lower against the Yen as investors preferred the traditional safe haven play the dollar will likely hold a protracted period of tighter ranges leading into next weeks Fed policy announcement. With the majority of analyst expecting the FOMC to maintain the status quo attentions will be keenly attuned to the rhetoric accompanying the statement. Focus today turns to consumer sentiment while Tuesday’s retail sales print will offer additional insight into the health of the recovery ahead of the monetary policy assembly.