Australian Dollar
Expected Range 0.7430 – 0.7630
The Australian Dollar starts Tuesday buying 75.30 US cents down over half a cent from yesterdays’ open. The market remain relatively unmoved after a mixed bag of results with the data releases yesterday. Locally the HIA New Home Sales climbed 8.2% but the MI inflation gauge was down 0.3%. The other talking point in the market was the Chinese Manufacturing PMI data missing expectation however the market reaction was muted in the lead up to the Reserve Bank’s interest rate decision which is announced at 2:30pm local time. Many in the market are expecting the bank to cut interest rate by 0.25% after a weak inflation number last week.
New Zealand Dollar
Expected Range 0.7060 – 0.7260
The New Zealand dollar has pulled back from Mondays open after a quiet day ahead of Inflation number out this morning. Similarly to Australia the Reserve Bank of New Zealand is concerned about the low levels of inflation so the announcement today will likely weigh on the decision when they meet next week. The New Zealand dollar was able to hit intraday highs of 0.7229 before finding resistance late in the day and pulling back from those levels and is currently buying 0.7165 USD.
Great British Pound
Expected Range 1.7380 – 1.7580
A fairly quiet start to the week as the Great British Pound remained range bound against most major currencies despite the Manufacturing PMI data release missing its mark. The main focus for the week will be the Bank of England decision out on Thursday where the market expectation is that they will cut rates by between 0.25% and 0.5%. There is also an expectation that the Bank of England may looking to increase its quantitative easing program in an effort to shore up the bank in the aftermath of the Brexit vote. The GBP is currently buying 1.7487 AUD, 1.8382 NZD and 1.3117 USD.
Majors
Expected Range N/A
A few data releases around Manufacturing and construction were released yesterday including the ISM Manufacturing PMI data all slightly missed expectations but it was not all bad news for the manufacturing industry while it had decelerated it still showed growth for the fifth month in a row. The data releases acted as a bit of an anchor for the USD which lost ground against most of the major currencies. There was a raft of manufacturing data released out of Europe yesterday with most releases hitting market expectation but the currency markets in general having relatively limited reactions.