Australian Dollar:
The Australian dollar pushed through 0.72 against the USD for the first time in a week after the RBA kept Interest rates on hold at 2% before ending the day at 0.7191. While they kept interest rates on hold this month they did signal that they would cut rates if the economic outlook for inflation remained low. During the European and US trading sessions the Aussie started to lose some steam heading towards 0.7150 before finding support in weaker than expected factory orders coming out of the US. Attention today turns to the Retails Sales data and the trade balance data out at 11:30 today.
We expect a range today of 0.7120 – 0.7250
New Zealand Dollar:
The NZD closed down 50 points yesterday after dairy prices fell by 7.4% over the last two months before finding some support after weak data out of the US. Dairy accounts for around 30% of New Zealand’s exports so weaker dairy prices will normally result in a weaker NZD. After opening the day at 0.6754 the NZD got to a low of 0.6650 before the factory orders in the US came in below expectations -1.0% against -0.8% and gave the NZD some much needed support. Attention today turns towards the unemployment rate which is released quarterly in New Zealand with expectations that the unemployment rate will increase to 6.0%.
We expect a range today of 0.6600 – 0.6850
Great British Pound:
The Great British Pound closed the day where it started against the USD after losing ground early in the European session. The Construction PMI data came out showed that the construction industry is growing but did come in slightly below expectations 58.8 against 58.9. After reaching lows of 1.5358 the GBP was given a bit of support during Wall Street trading when the US factory orders data came in to end the day about level. Attention today turns toward the Services PMI data out today before turning to the Bank Rate decision coming out Thursday in the UK.
We expect a range today of 2.1300 – 2.1700
Majors:
The Euro is down this morning after the amount of unemployed workers in Spain has increased by just over 80,000. Tourism is a significant part of Spain’s economy so as the summer season finishes they tend to see an increase in the number of workers unemployed. Looking to tonight for the Eurozone the ECB President Draghi will speak and the market is hoping that he will clarify comments made at the last ECB meeting regarding a possible expansion of the stimulus package. To the US and even though factory orders came in weaker than expected the USD was still up against most major currency pairs. The market will look towards the ADP No-Farm Employment change and trade balance data that is out tonight to see whether it can help support a rate hike in the Fed’s December meeting. Japan had a bank holiday so trade was limited looking forward to today we do have some consumer confidence and monetary base data out today.
Data releases:
AUD: Retail Sales m/m, Trade Balance
NZD: Employment Change q/q, Unemployment Rate
JPY: Monetary Base y/y, Consumer Confidence
GBP: Services PMI
EUR: ECB President Draghi Speaks
USD: Trade Balance, ADP Non-Farm Employment Change