Australian Dollar:
The Australian dollar fell across the board yesterday as Greenback strength pushed the local currency to lows of AUD/USD 0.7347. US unemployment claims data for the past week was expected to drop from 281,000 to 279,000, however the actual result confounded expectations by printing a staggering 26,000 drop in individual claims to 255,000. The result highlights the story of a continually improving US economy, and as such solidifies the argument that the US Federal Reserve is on track to raise interest rates later in the year. The AUD/USD opens at 0.7351 this morning, and the Aussie will look to its largest trading partner China for any price driving action today relating to Chinese Flash Manufacturing PMI numbers being printed in the afternoon.
We expect a range today of 0.7310 – 0.7390
New Zealand Dollar:
The NZD/USD opens weaker today at 0.6608 after positive economic data released in the US countered yesterday’s gains from the NZ cash rate reduction. As the RBNZ announced it was cutting the official cash rate to 3.00% the Kiwi rallied and reached highs of NZD/USD0.6695 almost breaking the 67 cent handle, however in overnight markets upbeat US figures saw the local currency drift back to previous levels. On the cards today we have local trade balance figures scheduled for release, however as forecasts are set for a significant reduction in the surplus, depending on the actual result the recent downward trend for the Kiwi may possibly continue into the close of the week.
We expect a range today of NZD/USD 0.6570 – 0.6650
Great British Pound:
The Cable was sent tumbling downhill yesterday as local retail sales figures trailed forecasts of a 0.4% increase, and printed at a disappointing 0.2% reduction for the month of June. These figures have brought into question the strength of Britain’s economic recovery as they do rely heavily on consumer demand. The Pound Sterling suffered further losses as Greenback strength overnight added to the downward pressure on the local currency, and opens lower this morning at GBP/USD 1.5510. The Pound also opens weaker at 2.1087 and 2.3454 against its Australian and New Zealand counterparts respectively. With no local data releases the GBP will look to the US for any direction going into the weekend
We expect a range today of GBP/AUD 2.1050 – 2.1130
Majors:
With Greece lawmakers yesterday accepting a second package of reform measures consisting of a combination of tax hikes and spending cuts, the indebted Euro member is now looking to re-open bailout talks with creditors. The EUR/USD has reacted positively to this news and reached highs of 1.1017 overnight, while at the same time shrugging off positive unemployment claims data being released out of the US. Upcoming today French/German manufacturing and services PMI information being released will provide an insight into how other major economies in the Eurozone are performing, and will also look to have a significant impact on the currency pair. The EUR/USD commences trade today at 1.0986.
Data releases:
CNY: Markit Flash Manufacturing PMI
EUR: French Flash Manufacturing PMI, French Flash Services PMI, German Flash Manufacturing PMI, German Flash Services PMI, Flash Manufacturing PMI, Flash Services PMI, Belgian NBB Business Climate
JPY: Flash Manufacturing PMI
NZD: Trade Balance
USD: Flash Manufacturing PMI, New Home Sales