Australian Dollar
Expected Range 0.6850 – 0.7050
There was a bit of relief for the Australian dollar yesterday, undeterred by the soft Chinese data, it was able to reach a high of 0.6957 against the US Dollar before closing the day at 0.6912. The Chinese GDP data can in at 6.8% vs 6.9% last quarter and Industrial Production number came in below last quarters numbers (6.2%) at 5.9%. Initially this news saw the Australian Dollar lose 40 points before it was able to bounce back through the 69 cent mark as risk sentiment improved. As we move away from the devaluations of the Yuan and the stock market in China stabilises buyers have come back into the market. Looking forward to today the Westpac Consumer Sentiment is released during local trade and overnight the US will have the CPI m/m data released.
New Zealand Dollar
Expected Range 0.6420 – 0.6550
The New Zealand Dollar open up 40 points this morning for the second day in a row as risk sentiment starts to improve. Following a terrible start to the year where the New Zealand Dollar posted losses on 9 out of the first 10 days of the year and losing 4 cents in the process. The New Zealand Dollar started the day flat and then reacted negatively to the Chinese data coming in below expectations hitting lows of 0.6415 before rallying to test 0.65 during overnight trade. The New Zealand CPI q/q will be released this morning and then attention will turn to the US data out tonight.
Great British Pound
Expected Range 2.0350 – 2.0700
A bad day for the Great British Pound against the AUD falling 230 points to open today at 2.0528 on the back of Australian Dollar strength and a dovish speech by the Bank of England Governor Mark Carney who pushed back the timetable for the Bank of England to raise interest rates. A raft of positive data releases including the CPY y/y, PPI Input m/m and RPI y/y which all came in ahead of expectations was not enough to give support to the GBP. Governor Carney said that it was not time to raise interest rates and that he would need to see significant improvement before it happened pushing expectations of a rate rise until the second half of 2017. He said he was looking for three things namely above average economic growth, wage growth to be improving and core inflation to be heading toward the target of 2%. The speech also saw the Pound drop 100 points against the USD and the EUR. Tonight we will have the release of some labour market data.
Majors
Expected Range N/A
The first day back from a bank holiday resulted in a quiet day locally with most of the direction of the US Dollar being taken from overseas markets. While the Australian Dollar was able to gain ground it is a small part of the gains the USD had made in the 2 weeks previously. The USD was able to make gains against the GBP following Governor Carney’s speech. Looking forward the US will have its building permits, CPI m/m and Core CPI m/m released. A quiet day ahead data wise for the Euro and the JPY with only the German PPI m/m data being released in the next 24 hours.