Australian Dollar
Expected Range 0.7480 – 0.7580
The Australian Dollar continued its positive run on Monday and was able to push through the 75 cent barrier to close the day purchasing 75.34 US cents. There were reports that Australia may lose its AAA credit rating early in the day but sentiment changed and the AUD followed the Asian Stock markets and their improving sentiment to get a boost as the day went on. Trade however was a little thin as the US markets were on holiday to celebrate Independence Day. A full day of data will see Retail Sales and Trade balance data released this morning before the closely monitored RBA decision out this afternoon. The market is expecting the RBA to take a wait and see approach and keep rates on hold however comments around Brexit and its potential impact will be of interest.
New Zealand Dollar
Expected Range 0.7180 – 0.7280
The New Zealand dollar had its fifth consecutive positive day since the Brexit decision and has been able to all but wipe out the losses from the event. Overnight trading saw the NZD climb to a high of 0.7240 as higher interest rates in New Zealand keep the NZD as an attractive currency to hold combined with a thin volumes due to the US markets being closed. With limited data out locally today the NZD will take direction from overseas market events including the release of the Chinese Caixan Services PMI.
Great British Pound
Expected Range 1.7425 – 1.7825
Adding more volatility to an already weakened Pound overnight the release of Construction PMI which revealed that the sector actually contracted for the month of June. The number came in well below May’s expectations 51.2 with the final print reading 46. It’s seems that many in the contraction industry has been unwilling to spend and commit to new projects in the lead up to the Brexit vote and potentially moving forward. This coupled with the resignation by Nigel Farage as the leader of the UKIP, one of the main leave supporters in the EU referendum, poured further doubt on if the Pound can recover in the short term and how long it will take for the UK to eventually split from the EU. Opening in Sydney, the Pound is changing hands at 1.7622 against the Aussie and 1.8373 versus the Kiwi.
Majors
Expected Range N/A
A fairly quiet day for the majors as the US took the day off for July 4 celebrations. The EUR and JPY were both able to gain some ground against the USD during subdued trade. The higher yielding currencies like the AUD and NZD had a positive day against the EUR and JPY of the back of risk sentiment improving since the initial shock of the Brexit decision. There are a raft of services PMI data and Retail Sales results coming out of Europe today.