Australian Dollar
Expected Range 0.7630 – 0.7740
Having fallen victim to some early session profit taking the Australian dollar clawed its way back yesterday after the latest labour force survey showed a net 26 100 jobs were created during the month of March. Bringing the headline unemployment rate down to 5.7 percent, the Australian dollar once again broke through the 77 US Cents handle reaching a high of 0.7736 when valued against its US Counterpart. In a broadly positive week for the Australian economy, in light of falling unemployment and growing business confidence the pressure has come off policy makers over the past few days to reduce interest rates from already record lows. Providing the final piece of the broader fundamental picture, inflation results aren’t expected until the end of this month. Looking ahead today, trade volumes are expected to bit light this morning ahead of GDP and Industrial Production releases from China at midday. Opening in a stronger positon the Aussie currently buys 76.90 US Cents.
New Zealand Dollar
Expected Range 0.6800 – 0.6900
The New Zealand dollar has fallen over the past 24 hours amid broad signs of US dollar strength. Slumping to a low of 0.6823 when valued against its US Counterpart, following two strong days’ worth of gains there were some clear signs of profit taking yesterday, particularly in across key commodity markets. With investors keen to secure gains ahead of today’s growth report from China, data on first quarter GDP and industrial output for March will be critical in driving near-term direction, particularly in the wake of Tuesday’s positive trade numbers. Opening one percent lower the New Zealand dollar currently swaps hands a rate of 0.6846.
Great British Pound
Expected Range 1.8350 – 1.8460
Indicating that officials remain a long way off from changing their mind on interest rate settings the Bank of England unanimously voted to keep monetary policy conditions unchanged overnight. What is likely to make such decisions even more challenging in the near-term, policy makers echoed a distinct reluctance to communicate any real commitment to an interest rate path ahead of the June 23 vote which will ultimately decide whether UK remains part of the European Union. In what could significantly dampen the value of the Sterling, the negative implications on growth were raised as part of last night’s meeting. Pushing the Sterling to an overnight low of 1.4090 when valued against its US Counterpart, the Great British Pound opens lower versus the Greenback currently trading at a rate of 1.4152.
Majors
Expected Range N/A
Supporting the US Federal Reserve’s caution in raising interest rates too soon US Consumer Prices rose by a mere 0.1 percent during the month of March. Despite labour market conditions which shows the world’s largest economy is running at a level close to full employment to date a tightening jobs market has yet to produce the type of wage and ultimately price growth policy makers would have liked. Comprehensively lifting off the table any likelihood the Fed will raise rates in April, the expectation of two hikes this year remains only barely intact. In a session which still marginally favoured the US dollar, globally investors have remained in a relatively upbeat mood throughout this week, a mood which is set to be tested ahead of several key macro prints from China today. Opening generally flat versus the euro (1.1262) and the Japanese yen (109.385), heightened levels of volatility remain a distinct possibility through to the end of this week.