Australian Dollar:
The Australian Dollar has managed to tick higher throughout trade yesterday even in the absence of any domestic or overseas economic data directly correlated with the local currency. During the Asian trade session the Aussie moved sideways and saw limited volatility, however overnight markets saw more driving price action as the AUD/USD reached highs of 0.7449. With quarterly inflation figures booked for announcement today as well as a speech from RBA Governor Stevens, today is gearing up to be an actioned packed day for the Australian dollar. Furthermore, as expectations for the April-June inflation report are set for a 0.8% increase, a result here that meets or exceeds expectations would most likely lead to speculation of a rate hike, as a higher CPI sometimes leads the central bank to raise rates to contain inflation. The AUD/USD opens today at 0.7426.
We expect a range today of 0.7380 – 0.7460
New Zealand Dollar:
With investors anxiously awaiting tomorrows rate decision from the RBNZ the NZ dollar sat on the fence throughout the majority of yesterday’s trade session while eventually edging higher to reach highs of NZD/USD0.6654. The Reserve bank is widely expected to cut the official cash rate by 25 basis points tomorrow, with some speculators even forecasting a 50 basis point cut. The local currency is expected to tread water around familiar ranges until the announcement tomorrow, and a lack of domestic data being released today will see the NZD look overseas for any direction during the upcoming session. The Kiwi commences trade this morning at NZD/USD0.6633.
Great British Pound:
The Cable has experienced a slight sell off last night as a report was released showing public sector net borrowing had fallen less than expected in the month of June. Government borrowing was forecasted to drop to an 8.5billion pound deficit, however a report showing the actual deficit still at 9.4 billion pounds saw the pound sterling slump against most its major counterparts. Upcoming today the Bank of England will be releasing its monthly interest rate vote, however the general consensus is set an expectation of a unanimous vote by all members to keeps rates on hold. The local currency opens at 1.5552 against its US counterpart, and at 2.0935 and 2.3434 against its Australian and New Zealand counterpart respectively.
We expect a range today of GBP/AUD 2.0900 – 2.0980
Majors:
The Euro has managed to gain ground against its US counterpart overnight as American financial services and rating agency Standard & Poor’s raises Greece’s credit rating on talks with its creditors. S&P improved Greece’s rating from negative to a stable CCC+, while stating that the countries liquidity perspective has improved and that their chance to default on more debt this year is very minimal. The EUR/USD reached a high of 1.0963 off the back of this news, while maintaining those levels throughout the remainder of the session to open this morning at 1.0940. Upcoming for the EUR/USD today we have US home sales data which is expected to show an increase in the number of homes sold in June, as well as US crude oil inventory figures.
Data releases:
AUD: MI Leading Index m/m, CPI q/q, Trimmed Mean CPI q/q, RBA Gov Stevens Speaks
CNY: Foreign Direct Investment ytd/y
EUR: Italian Retail Sales m/m
GBP: MPC Official Bank Rate Votes, MPC Asset Purchase Facility Votes
JPY: All Industries Activity m/m
USD: HPI m/m, Existing Home Sales, Crude Oil Inventories