Australian Dollar
Expected Range 0.7610 – 0.7680
The Australian dollar initially pushed higher yesterday following the release of trade data from China which showed imports dropped by a moderate 1.7 percent during March whilst export numbers comfortably out-paced even the most optimistic of forecasts. Cooling growth fears which surround the world’s second largest economy, signs of greater stability have been welcomed by the broader market. Having traded as high as 0.7716 when valued against its US Counterpart, topside targets were limited overnight as the US dollar rallied to its highest level in a week. Opening marginally lower than where we kicked off yesterday at 0.7652, today’s headline risk event comes in the form of employment numbers for March where employers are expected to have added 18 600 new jobs to the economy.
New Zealand Dollar
Expected Range 0.6870 – 0.6950
The New Zealand dollar has remained relatively stable in the context of substantial offshore flows oscillating at a level close to the 69 US Cents mark over the past 24 hours. Capping gains at an eventual high of 0.6952, the US Dollar has staged a notable recovery during the overnight trade with soft economic data doing little to take the shine off the world’s reserve currency. Suggesting its recent sell-off had stretched too far, the Kiwi remains one of only a handle of units to at least hold its ground against a stronger greenback. In what’s shaping up as another window dominated by US macro developments, lurking in the background is tomorrow’s GDP print from China. Opening flat this morning the Kiwi currently buys 69.17 US Cents.
Great British Pound
Expected Range 1.8500 – 1.8600
Losing 0.5 percent versus a notably stronger Greenback the Great British Pound capped its advance at a rate of 1.4279 yesterday. Opening closer to the 1.4200 mark this morning, technical adjustments and speculative positioning took front stage as the US dollar appreciated despite a poor fundamental backdrop. Whilst US data flows tonight will garnish significant attention so too will the Bank of England who are set to meet to discuss existing monetary policy settings. Opening in an unchanged positon versus the Australian dollar at a rate of 1.8555 the Sterling is weaker versus the New Zealand dollar (2.0526).
Majors
Expected Range N/A
US and European stock markets were buoyed overnight by improved trade data from China whilst US numbers broadly disappointed. In figures released from the world’s largest economy US retail sales unexpectedly fell in March as households reined in their purchases. In other flows a separate report showed producer prices contracted by -0.1 percent a further indicator that US growth is likely to have been relatively flat during the first quarter of this year. In what’s likely to keep the spotlight firmly on the US, investors are gearing up for further flows tonight ahead an all-important inflationary read. Increasing the likelihood that policy makers will push back additional interest rates increases, if concerns stretch beyond simply the lack of inflation, dovish undertones are set flow think and fast from the US Federal Reserve. In a somewhat surprising move overnight, the US Dollar broadly outperformed, trading to its highest level in more than a week. Opening stronger versus the Japanese Yen at a rate of 109.340, its strength also sees the euro lower at a rate of 1.1270.