Australian Dollar
Expected Range 0.7500 – 0.7580
Well off its weekly high point of 0.7678 when valued against its US Counterpart, the Australian dollar turned lower against a handful of its major peers last week, struggling to advance in the presence of selling pressures which were amplified by both domestic and external data points. In what’s likely to have a direct impact on monetary policy expectations, the domestic highlight this week comes in the form of employment figures where its expected employers had added a further 20 000 new jobs during the month of March. In addition to the labour market release, CPI figures from the US as well growth figures from China both poise significant risk events for the Australian dollar. Opening around half a cent lower this morning the Australian dollar currently buys 75.46 US Cents
New Zealand Dollar
Expected Range 0.6770 – 0.6840
The New Zealand dollar received a late week boost on Friday, advancing when valued against its US Counterpart as oil prices rallied and interest in the world’s reserve currency waned. Trading to a high of 0.6829 against the Greenback, commodity backed currencies across the board benefitted following a 6.6 percent rise in the price of crude. Whilst the economic backdrop globally continues to deliver a broadly cautious undertone, news flows from China this week represent a wild card as GDP growth is expected to have slowed to 6.7 percent year on year down from 6.9 percent. Opening just on the 68 US Cents handle today, volumes early in the piece suggest markets are off to relatively flat start.
Great British Pound
Expected Range 1.8660 – 1.8750
Saving the Great British Pound from some potentially large losses was a weaker Greenback last week as US policy makers remained split on the future pace of additional interest rate hikes. Despite data flows on Friday which showed manufacturing production and factory output shrunk during the month of March, the Sterling’s reaction was somewhat muted opening in a stronger position versus the US dollar this morning at a rate of 1.4120. On the outlook this week investors will be looking towards another monetary policy meeting for the BOE in addition to an inflationary read. In other moves the Sterling opens marginally stronger versus the Aussie (1.8701) whilst lower against the Kiwi (2.0728).
Majors
Expected Range N/A
The US Dollar was little changed last week as the worlds reserve currency continued to trade at a level just above its 11 month low. Despite several jolts of severe volatility during the early parts of this year, the greenback has done well to hold back its bearish under currents as markets this week look towards a key inflationary read from the US. As policy makers globally continue to grapple with record low levels of inflation, here lies the biggest single challenge facing central banks globally, that is that the record levels of monetary stimulus being thrown at economies around the globe has not yet created the wage growth and hence inflationary pressures, theory tells us it should. Given the combination of low interest rates and strengthening currencies, unless the labour market can generate the necessary price pressures, policy makers will continue to be motivated by lower interest rate settings. In what continues to create an interesting global dynamic, more questions are likely so surface over the effectiveness of existing policy responses particularly if currencies like the euro and the yen continue to appreciate. Opening in a stronger position the 17-nation euro currently swaps hands at a rate of 1.1392.