Australian Dollar:
The Australian dollar traded within a two cent range when valued against its US Counterpart last week, opening this morning higher as it buys 77.70 US Cents. Whilst Friday’s economic calendar provided very little for investors to sink their teeth into, the main contributor towards a stronger Aussie last week came in the form a more dovish US Federal Reserve which still has markets pricing in either one or two rate cuts this year with the consensus still favouring a December hike over September. On the horizon this evening market participants continue to hold their breath in anticipation of a definitive Greek debt solution with some compromises on election promises ultimately required in order for a default to be avoided. Looking further ahead this week Manufacturing PMI from China tomorrow will also be a key Aussie dollar driver.
We expect a range today of 0.7730 – 0.7810
New Zealand Dollar:
Whilst the New Zealand dollar treaded water for the majority of Friday’s session ahead of ongoing Greek Debt negotiations this evening, overall the Kiwi has struggled significantly over the past fortnight. In the wake of a notable change in course by the RBNZ the New Zealand dollars trade-weighted index, which measures the currency’s value against those of its major trading partners has fallen a staggering 4.2 percent since June 11. Opening weaker this morning at a rate of 0.6910 when valued against its US Counterpart, Greek debt talks this evening promise to dictate broader risk flows with a positive outcome likely to bolster demand for New Zealand’s dollar.
We expect a range today of 0.6870 – 0.6950
Great British Pound:
The Great British Pound opens steady when valued against its US Counterpart this morning at rate of 1.5871. In figures released on Friday Britain’s budget deficit shrunk in May by its largest amount since 2007, as tax income jumped. In what proved to a quite end to the week short-term direction remains highly dependent on the outcomes from emergency debt meetings which took place over the weekend. Whilst virtually unchanged against the Greenback the Sterling is stronger when valued against both the Australian dollar (2.0418) and the New Zealand dollar (2.2971).
We expect a range today of 2.0380 – 2.0460
Majors:
Finding a few elements which spoke to the dovish during last week’s Federal Reserve meeting, policy makers voted unanimously to keep rates hold during May. In a move which weakened the value of the world’s reserve currency, investors still remain unsure when questioned on the timing of the first rate hike given there remains only four meetings left this year. Favouring a move in either September or December given these meetings contain accompanying statements, rate messaging will remain a natural theme in the absence of any global shocks to broader risk sentiment. Opening soft when valued against several of its major counterparts, a resolution from Greece sooner rather than later will be required in order for risk appetite to remain buoyant with any negative fall-out likely to trigger a shift back into safe haven assets like the US dollar. Opening at the mercy of Greek debt talks the Euro is weaker at a rate of 1.1344.
Data releases
AUD: No data today
NZD: No data today
JPY: BOJ Monthly Report
GBP: No data today
EUR: Consumer Confidence
USD: Existing Home Sales m/m
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