Australian Dollar
Expected Range 0.6920 – 0.7020
Demand for the Australian dollar was bolstered intraday yesterday following a trade report from China which showed exports grew by 2.3 percent during December, well up from the forecasted decline of 4.1 percent. Marking the largest increase since February 2015, imports shrunk by 4 percent, a number also which comfortably surpassed expectation. Enough to lift the Australian dollar to a high of 0.7048 when valued against its US Counterpart, the Aussie’s run up above the 70 US Cents mark has once again proven to be short-lived. Given a large chunk of negative sentiment has been flushed out this week, Chinese authorities still maintain a significant amount of influence given the reactions elsewhere to currency adjustments and policy changes. Opening marginally lower this morning the Aussie currently buys 69.60 US Cents.
New Zealand Dollar
Expected Range 0.6490 – 0.6560
Having rallied to an overnight high of 0.6590 when valued against its US Counterpart following improved data flows from China, the New Zealand dollar’s brief recovery faded off the back of a disappointing session within the United States. Maintaining their risk-off preference, investors have once again pushed equities lower and treasuries higher with the price of crude struggling to maintain its value up above the critical $US30 per barrel mark. With markets stabilising over the past few sessions, some traction has been in made in the wake of efforts to minimalize the chaos triggered by equity and currency interventions. Opening steady this morning the New Zealand dollar currently trades at a rate of 0.6527.
Great British Pound
Expected Range 2.0700 – 2.0810
The Great British Pounds
value has stabilised over the past 24 hours ahead of this evenings Bank of
England Monetary Policy decision. In the wake of the significant volatilities
experienced already this year, those violent price swings have flowed through to
diminished growth expectations, lower forecasts which could plague the efforts of
policy makers wanting the accelerate the push towards tighter monetary settings.
With investors adopting a wait and see approach, downside targets of 1.4370
remain important support for the Sterling when valued against its US
Counterpart. In what’s been a quieter 24 hour window the Great British Pound
opens lower steady against the Greenback (1.4444), lower versus the Kiwi (2.2125)
whilst stronger versus the Aussie (2.0755)
Majors
Expected Range N/A
Emerging market stocks rallied on Wednesday after China’s total trade balance fell far less than expected in December. Returning to markets for the first time in days, investors have remained selective following two weeks of selling, albeit somewhat buoyed by the lack of daily intervention carried out in China over the past three sessions. With many emerging market currencies recovering, the shift into other major growth linked units has been sluggish. In commentary delivered by the US Federal Reserve yesterday, district members described business activity nationwide as modest with sentiment overall still positive. On the whole supporting the four interest rate hikes previously promised, this outcome remains heavily dependent on data flows and more so inflation which still sits a long way from the Fed’s two percent objective. Overcoming the daily nerves which now surround China’s yuan fix, investors look towards an important labour market report in Australia followed by an interest rate decision in the UK.