Australian Dollar
Expected Range 0.7200 – 0.7400
The Australian Dollar opens up this morning to open the day at 0.7300 against the USD after Brent Crude oil increased 3% and a weakened USD. Overnight the US Goods Trade Balance showed that the deficit had widened from the month before (-60.5B Dec vs -58.4B Nov) and while consumer confidence came in above expectations at 96.5 it is still below September numbers. The increase in the oil prices from the lows have also resulted given the AUD a boost to 0.73000 however their does appear to be some resistance and has struggled to push through. Looking forward to today there is no data out locally so the market will look toward commodity prices and overseas markets for direction.
New Zealand Dollar
Expected Range 0.6800 – 0.7000
The Kiwi rallied overnight as the price of oil moved up almost 3% per barrel sparking a risk on spree by some institutions during the offshore session. Overnight Kiwi kept to a tight 40 pip range with the low being 0.6840 and a high of 0.6882. Resistance for the still appears to be around the 0.6900 cents mark and with no data out of New Zealand this week, further direction will be taken from offshore events as traders look to square their positions prior to New Year. Against its antipodean cousin, trade has been sideways with the pair opening in Sydney this morning at 0.9408.
Great British Pound
Expected Range 2.0100 – 2.0600
A tick up in the oil price overnight helped commodity based currencies appreciate as the Australian and New Zealand Dollar both rallied against the British Pound. The southern hemisphere pair moved up on the rise in the oil price with the AUD and NZD opening in Sydney at 2.0293 and 2.1566 respectively. The Pound also took a tumble against the US Dollar overnight as a stellar print in US Consumer Confidence and an indifferent reading in the Goods Trade Balance. On the UK data front tonight see’s the release of the Nationwide House Price Index would should provide so pound movement should the figure come in better than expected.
Majors
Expected Range N/A
In a quiet day for data the US release of the goods trade balance and consumer confidence data was the main focus. The consumer confidence data and goods trade balance data came in ahead of expectations however the market reactions relatively muted with most overnight movements coming off the back of the increasing oil prices. The Euro and JPY had fairly quiet days losing ground to the commodity linked currencies like the AUD and NZD but remaining steady against most other currency pairs. With no data out today and a bank holiday Thursday and Friday in Japan the markets will be taking what direction there is from overseas markets. During European trading we have the Spanish Flash CPI y/y coming with the markets expecting a growth of 0.1%.