Australian Dollar:
A blank domestic docket offered little to spark investor action however technical supports helped fuel an upward push throughout trade on Monday. The Aussie advanced during the course of the domestic session as the promise of widespread accommodative monetary policy helped fuel a risk appetite rally and the AUD touched session highs at 0.7269. The dollar then consolidated throughout the North American and European sessions buoyed by softer than anticipated new home sales and a dip in U.S treasuries maintaining a tight trading band into the daily close. The AUD continues to bounce about between technical support and resistance points ahead of a key FOMC announcement and quarterly inflation print Wednesday and next weeks all important RBA rate/policy announcement. Having struggled to break outside said bands the currency is poised for a correction. All we need is a catalyst.
We expect a range today of 0.7160 – 0.7385
New Zealand Dollar:
The New Zealand dollar crept back toward the 0.68 handle throughout trade on Monday buoyed by softer than anticipated US new home sales data and a risk appetite rally. Traders jumped on higher yielding and risk based assets as markets absorbed last week’s promise of easy money and accommodative policy proffered by the ECB and PBOC. Touching intraday highs of 0.6805 the Kiwi eased into the daily close and we swap hand this morning buying 0.6780 U.S cents. Attentions turn to domestic trade balance numbers for direction ahead of Wednesday’s US Fed policy announcement and Thursday’s RBNZ rate statement.
We expect a range today of 0.6680 – 0.6880
Great British Pound:
The Great British Pound advanced throughout trade on Monday recouping some of last week’s losses. Buoyed by a dip in Greenback demand following softer than anticipated new home sales and a drop in oil prices Sterling touched intraday highs at 1.5381. Investors however seemed reluctant to push the currency higher as risk appetite flows helped arrest the USD’s decline. Attentions today turn to quarterly GDP numbers a key marker for economic health ahead of next week’s BoE inflation report and monetary policy statement.
We expect a range today of 2.0950 – 2.1450
Majors:
Having enjoyed the biggest weekly advance since mid-May the Greenback relinquished gains edging lower throughout trade on Monday. A dip in oil prices and U.S stocks saw the USD move lower as investors attentions turn to Wednesday’s all important Fed policy announcement and rate statement. While it is widely anticipated the FOMC will abstain from disrupting the status quo investors will be keenly attuned to any annotation signalling a December rate hike is still on the table as diverging monetary policy remains the big ticket item driving direction through the week ahead. The World’s base currency came under further pressure after a surprise contraction in New Home sales. Purchases slumped a seasonally adjusted 11.5% throughout September off setting an earlier advance in existing home sales and raising concerns surrounding the stability of the housing market in the face of slowing domestic and global growth. Down 0.4% against the Yen and 0.3% against the Euro the dollar Index feel back below 97 having touched two and a half month highs on Friday. Attentions today turn to Core Durable Goods Orders and Consumer Confidence for direction and guidance ahead of the Fed and BoJ policy meetings.
Data releases:
AUD: No Data
NZD: Trade Balance
JPY: SPPI (Services Producer Price Index) y/y
GBP: Prelim GDP q/q, Index of Services and 10 year Bond Auction
EUR: M3 money Supply y/y and Private Loan’s y/y
USD: Core Durable Goods Orders, CB Consumer Confidence, Durable Goods Orders, S&P Composite 20 HPI y/y, Flash Services PMI and Richmond Manufacturing Index.