Australian Dollar:
The Australian dollar has treaded water during the early parts of this week trading within a tight 50 basis points range on Monday when valued against its US Counterpart. Opening today marginally weaker as the Aussie currently buys 71.14 US Cents, a broader shift away from higher yielding currencies overnight has been at the heart of underlying selling trends. In what’s shaping up as a busy 24 hour window ahead, manufacturing numbers from China this morning followed by the Reserve Banks monthly monetary policy statement this afternoon will both be closely watched with any dovish comments from Glenn Stevens related to the markets recent wild swings likely weigh on the Australian dollar in the short-term.
We expect a range today of 0.7050 – 0.7180
New Zealand Dollar:
The anticipation which surrounds interest rate adjustments from the US Federal Reserve has plagued the New Zealand dollar overnight with the Kiwi struggling to manage with the markets plight back into the world’s reserve currency. With traders globally gearing up in the hope US interest rates will rise next month the New Zealand dollar has subsequently lost its shine. Ahead of tonight’s latest fortnightly Global Dairy Trade auction, investors firstly will need to navigate Chinese manufacturing and non-manufacturing PMI’s which are due for release later this morning. Declining across the board the New Zealand dollar opens notably lower as it buys 63.38 US Cents.
We expect a range today of 0.6280 – 0.6380
Great British Pound:
The Great British Pound has comfortably given up the 1.5400 handle when valued against its US Counterpart overnight, opening lower this morning at a rate of 1.5344. Maintaining its downward trajectory trading conditions have been light over the past 24 hours as investors took advantage of a Bank holiday in London. In the absence of any notable economic prints to provide support tonight’s manufacturing PMI read will be an important one given the wave of interest in the United States recovery story at present. Despite opening lower against the Greenback the Sterling is stronger against both the Aussie (2.1566) and the Kiwi (2.4193)
We expect a range today of 2.1480 – 2.1620
Majors:
The US Dollar has gone from strength to strength over the past two sessions that is despite the fact Wall Street wrapped last night, recording its worst month since 2012. In the absence of any substantial data releases from the world’s largest economy, traders have continued to hold long US dollar positions in the hope rates will start to normalise as early as September after Fed Vice Chairman Stanley Fischer over the weekend said US inflation would likely rebound as pressure from the dollar fades, allowing rates to be raised gradually. Moving away from the United States, the Euro has done well to advance in the context of a stronger Greenback, moving to highs of 1.1262 after estimates of core CPI all met expectation as did German retail sales numbers. Both of which proving to be Euro supportive the focus intraday today is likely to temporarily shift back to China ahead of a raft of PMI prints from the Eurozone this evening, prints which act as a leading indicator of economic health.
Data releases
AUD: Building Approvals m/m, Current Account, Cash Rate, RBA Rate Statement
NZD: No data today
JPY: No data today
GBP: Manufacturing PMI
EUR: Spanish Manufacturing PMI, German Unemployment Change, Unemployment Rate
USD: ISM Manufacturing PMI
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