Australian Dollar:
Regularly running into resistance close to the 0.7350 mark when valued against its US Counterpart last week, the Australian dollars high sat a remarkable two cents above its early week low of 0.7190. Well supported by the neutral settings handed down by RBA Governor Glenn Stevens, third quarter GDP which showed the domestic economy grew by 0.9 percent also played an important role. Despite commodity prices which continue to move in a southerly direction, the Australian dollar has enjoyed a solid late year rally as investors look to batten down the hatches ahead of the Federal Reserve’s first interest rate hike in nine years. Ahead of a week jam packed with economic releases, particularly from China, the Australian Dollar opens this morning in a solid position as if currently buys 73.32 US Cents.
We expect a range today of 0.7280 – 0.7380
New Zealand Dollar:
The New Zealand dollar has been well supported month to date when valued against its US counterpart, opening this morning stronger at a rate of 0.6742. Trading in an upwardly direction the Kiwi’s value this week remains set to be dictated by macro flows from China as well Thursdays monetary policy decision by the RBNZ. In what’s likely to be a period of heightened volatility there appears a degree of uncertainty as many economists favour towards a cut, a view not necessarily shared across the board given pricing leans towards a hold.
We expect a range today of 0.6700 – 0.6780
Great British Pound:
The Great British Pound bounced off intraday lows at 1.5080 moving back through 1.51 and touching intraday highs at 1.5156 before edging lower into the close on Friday. Having suffered fresh 7 month lows in the lead up to the ECB policy announcement Sterling held a relatively tight trading range despite a lack of headline data and general Greenback positivity. The USD rallied recouping some of Thursday’s losses after an upbeat and stronger than anticipated Non-Farm payroll report paved the way for a December policy amendment. Cable looks to have entered a cycle of lower highs and lower lows suggesting we are poised for a break out and measured move below the psychological 1.50 barrier. Attentions today turn to NIESR GDP estimates as a marker for direction into the new week.
We expect a range today of 2.0350 – 2.0750
Majors:
Hints of a substantial change in monetary settings failed to eventuate from the European Central Bank last week, as a cut in the depositary rate along with an extended timeframe for the existing package fell well short of what had been previously communicated by President Mario Draghi. Finishing the week stronger when valued against its US Counterpart at a rate of 1.0875, the ECB’s governing council did state that inflationary forecasts were not as bad as first feared, hence the need to lower expectations surrounding future easing. With a hint of volatility returning to markets last week, the US dollar received a further boost on Friday after payroll numbers for the month of November comfortably beat consensus forecast. Given market participants have now all but priced in a December rate hike, this week offers plenty given another string of key macro developments from the United States.
Data releases
AUD: ANZ Job Advertisements m/m
NZD: No data today
JPY: BOJ Kuroda Speaks
GBP: BOE Gov Mark Carney Speaks
EUR: Eurogroup meetings
USD: No data today
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