Australian Dollar:
Whilst the Australian share market notched up its sixth consecutive day worth of losses, plummeting to a two and a half year low, the Australian dollar continued on its relatively resilient path during intraday trade on Tuesday. In light of minutes from the Reserve Bank’s most recent meeting which re-affirmed a stance suggesting there is further scope for easing, the Australian dollar traded as high of 0.7283 when valued against its US Counterpart. Ahead of what’s set to be one of the most highly liquid and volatile sessions of the year, it’s widely expected the US Federal Reserve will officially lift their benchmark cash rate when they meet this evening. Opening steady this morning the Australian dollar currently buys 71.92 US Cents.
We expect a range today of 0.7120 – 0.7350
New Zealand Dollar:
The New Zealand dollar has traded between a low of 0.6740 and a high of 0.6825 over the past 24 hours when valued against its US Counterpart. Generally weighed down by a US dollar Index which rose in the wake of improved inflationary signs from the world’s largest economy, stronger price pressures have simply added to the expectations which surround the US Federal Reserve’s likely decision to increase borrowing costs this evening. Ahead of tonight’s highly anticipated FOMC meeting, investors will firstly need to digest domestic third-quarter current-account data which is due for release at 10:45am. Opening marginally stronger one New Zealand dollar is currently worth 67.64 US Cents.
We expect a range today of 0.6710 – 0.6820
Great British Pound:
UK Inflation edged back up above zero for the first time in four months, figures released overnight showed. Still a long way from the Bank of England’s target, prices managed to rise by 0.1 percent during November, a result which offered only temporary and moderate support to the currency. Opening weaker this morning at a rate of 1.5044 when valued against its US Counterpart, support at the 1.50 handle remains important in lead up to this evenings FOMC monetary policy statement. Adding further spice to what is already shaping up as a busy 24 hour window, a health check on labour market conditions along with wage growth numbers will also play a critical role. In other currency moves the Sterling opens stronger against the Aussie (2.0916), whilst weaker against the Kiwi (2.2235).
We expect a range today of 2.0810 – 2.1020
Majors:
The US dollar has risen versus both the euro and yen during overnight trade as bond yields drifted higher in the lead up to this evenings Federal Reserve Monetary Policy Statement. With futures markets pricing in a 78 percent chance of an interest rate hike, investors will be quickly looking beyond the Fed’s first rate hike in nine years, in the hope clarity will be provided over the broader trajectory of borrowing costs. Having oscillated close to a 12 year peak over the past few weeks, the US dollars push higher comes at a distinct time, where unlike the Fed other major central banks globally continue to deliver some of the loosest monetary settings witnessed in modern times. With markets now well and truly bracing for impact this evening, given the context of what lies ahead moves have been somewhat muted in the aftermath of an improved empire state manufacturing index overnight, whilst US inflation during the month of November, came in on forecast, at zero percent. Coming off highs close to the 1.10 mark the Euro currently swaps hands at a rate of 1.0920 whilst the Yen is weaker at 121.749.
Data releases
AUD: RBA Assistant Governor Debelle Speaks
NZD: GDT Price Index
JPY: No data today
GBP: Average Earnings Index 3m/y, Claimant Count Change
EUR: French Flash Manufacturing PMI, French Flash Services PMI, German Flash Manufacturing PMI, German Flash Services PMI, Flash Manufacturing PMI, Flash Services PMI
USD: No data today