Australian Dollar
Expected Range 0.7110 – 0.7310
The Australian Dollar rally continued through trade on Monday bolstered by gains across equities and commodity prices. Risk on trade lead a push toward higher yielding assets and saw the AUD run through resistance at 0.72 to touch intraday highs at 0.7246. Australia’s relatively stable economic outlook and steady labour market are expected to allow the Reserve Bank to maintain its current approach to Monetary policy through the first and second quarters of 2016, boosting demand for net longs. In a global environment plagued by low and negative interest yields demand for the higher yielding AUD has increased. While the AUD remains vulnerable to the slowdown plaguing China and broader Asia the short term outlook and risk trend will likely add support to the current rally. Attentions this week turn to the G20 Summit of Central Bankers and Finance Ministers with commitments to growth likely to fuel further risk demand.
New Zealand Dollar
Expected Range 0.6580 – 0.6780
The New Zealand Dollar rallied through trade on Monday punching through 0.67 U.S cents as demand across commodity driven currencies improved on the back of stronger oil prices and burgeoning demand for risk. Oil, commodity and equity prices all rallied through trade on Monday bolstering risk on trade and demand for a higher yield return. Attentions today turn to US consumer confidence and the G20 summit for direction and validation the risk rally will continue.
Great British Pound
Expected Range 1.9350 – 2.0050
The Great British Pound suffered a dramatic sell-off throughout trade on Monday touching 7 year lows at 1.4056. Comments from London Mayor, Boris Johnson, announcing his support for those campaigning to leave the EU triggered a sharp decline as investors rushed to short GBP positions. Johnson is widely tipped to succeed David Cameron as leader of the conservative party and his contrasting outlook highlights the divided across the wider populace. Broader opinion polls have Britons opting to remain in the EU however a large portion of voters are still undecided adding further uncertainty to the campaign and economic stability. Ratings agents Moody’s and Fitch have stressed the cost of leaving the EU will propagate both immediate and long term growth risk and have both confirmed they would review the country’s credit rating should a “Leave” vote emerge most popular. Attentions today turn to Inflation report hearings as investors contrast geopolitical concerns against macroeconomic policy. We expect Sterling to remain under pressure after opening this morning buying 1.4151 USD.
Majors
Expected Range N/A
The U.S Dollar rallied strongly against safe haven and risk off currency partners through trade on Monday touching 3 weeks highs after gains in commodity prices and equities bolstered demand for risk. The Greenback dollar index advanced nearly 1% to its highest level since February 3rd moving through 1.1050 and 113.30 against the EUR and Yen respectively. The 19 nation shared unit suffered a heavy sell off at the hands of shifting risk demand and looming Brexit fears. Investors scrambled to protect against volatility across GBP and EUR as the June 23rd referendum approaches and continues to muddy the economic and financial outlook. Attentions today turn to US consumer confidence as a critical marker for domestic economic health and possible indicator against future consumer spending. A strong read would support last Friday’s strong CPI inflation report and potentially improve the broader inflation outlook ahead of this week’s PCE price index print. Federal Reserve Monetary policy expectations remain in focus, however while risk on trade continues the U.S Dollar recovery will likely find support.