Australian Dollar
Expected Range 0.7120 – 0.7180
The Australian dollar has battled through the
past 24 hours, initially rebounding strongly from a two week low when valued
against it US Counterpart, assisted by steadier equity markets across China. In
moves so abrupt on Monday China’s government were forced yesterday to inject
funds directly into the financial system, those efforts have for the time being
stabilised markets. Having traded between a low of 0.7132 and a high of 0.7213
when valued against its US Counterpart the Australian dollar opens lower this morning
currently buying 71.50 US Cents. Looking ahead today, in light of a quiet
economic calender domestically the Aussie remains vulnerable, dependent once
more on the direction of broader Asian equity markets.
New Zealand Dollar
Expected Range 0.6660 – 0.6730
An unexpected decline in global dairy product prices, a stronger US dollar amid ongoing growth concerns in China, have all combined over the past 24 hour window dragging down the New Zealand dollars value. In what’s been an extremely shaky start to the New Year the New Zealand dollar has comfortably broken below the 67 US Cents mark overnight, trading as low as 0.6677 as broader measures of risks have clearly favoured a shift backs it’s the world’s safest and deepest pockets. Opening this morning at a rate of 0.6693 when valued against its US Counterpart macro releases from the United States are likely to play a crucial role during the backend of today as investors look towards fewer price swings developing from China’s stock market.
Great British Pound
Expected Range 2.0440 – 2.0550
Despite a report overnight which showed the construction sector outperformed during the month of December, the Great British Pound has once again struggled under the weight of a stronger US dollar. Maintaining its bearish downward channel, a low of 1.4638 was eventually fetched when valued against its US Counterpart as the Sterling now faces some stiff resistance on approaches towards the 1.4700 mark. Whilst stronger this morning versus both the Australian dollar (2.0498) and the New Zealand dollar (2.1896), a Services PMI read tonight followed by a string economic releases from the United States remain set to be key contributors to price activity over the coming 24 hours.
Majors
Expected Range N/A
China’s central bank aggressively injected $19.9 billion worth of funding in an attempt to support financial markets on Tuesday. Stabilising the stock market following Monday’s 7 percent sell off, Monday’s bruising session has further highlighted just how bumpy the road to liberalisation could be as policy maker’s grapple with the need to support growth targets via improved liquidity knowing broader foundations may not be solid enough to absorb the lower costs of borrowing. In currency flows overnight the euro slumped to its lowest level in a month versus the Greenback following a disappointing CPI read which showed further inflationary shortfalls. In other moves the Yen rallied for a second day, still well supported in the wake of Monday’s stock market shocks. In what appears to be a fragile environment investors continue to favour traditional safe havens in the hope data flows will turn positive over the coming few days.