Australian Dollar:
The Aussie dollar has had a volatile start to the morning following the Federal Reserves’ decision to raise interest rates by 0.25%. For the most part the decision was fairly close to what the market was expecting with the focus on an improving jobs market and looking for an improving inflation rate before raising rates again. The AUD/USD spent most of the day trading between 0.7180 and 0.7220 remaining pretty steady however in the lead up to the decision and just after the decision we saw a lot of volatility in the market. The decision saw the market go from 0.7230 down to 0.7182 and then back up to 0.7274 and at the time of writing it is currently back at 0.7220.
We expect a range today of 0.7100 – 0.7350
New Zealand Dollar:
The New Zealand dollar finds itself this morning roughly where it started at 0.6755 against the USD after an up and down morning following on from the Fed’s decision. The decision to raise interest rates went along with the market expectations of increasing rates but putting off any increases in the near future. The NZD saw lows of 0.6741 and highs of 0.6827 in the space of one hour before pulling back to 0.6755 where we are now. With the focus now quickly shifting to the GDP q/q data that is being released this morning with the market expecting some growth in the economy.
We expect a range today of 0.6600 – 0.6900
Great British Pound:
The GBPUSD closed slightly down this morning after briefly touching a 1 week high of 1.5085 after the rate decision. After a quiet day as per the other major currencies there was quite a bit of movement around the decision but in the end we start today at 1.5005. While also ending the day down against the NZD (2.2140) and the AUD (2.0771). Looking forward to today we have the retail sales m/m data out today.
We expect a range today of 2.0500 – 2.1000
Majors:
The Federal Reserve has moved the interest rates for the first time in 7 years and increased them from historical lows of 0.25% to 0.5%. While indicating that there are concerns that net exports are and inflation is currently running below the committees 2% long run objective, there are positive signs coming out of the labour market, household spending and business fixed investment is up the Fed decided that December was an appropriate time to raise rates. They have indicated that they will be looking for a gradual increases during 2016. The USD did increase slightly against JPY and EUR however for the most part despite expectations the currency markets did not have much to react to.
Data releases:
AUD: RBA Bulletin
NZD: GDP q/q
JPY: Trade Balance
GBP: Retail Sales m/m, CBI Industrial Order Expectations
EUR: German Ifo Business Climate, ECB Economic Bulletin
USD: Philly Fed Manufacturing Index, Unemployment Claims, Current Account