Australian Dollar
Expected Range 0.7200 – 0.7330
The Australian dollar continued its precipitous reversal through trade on Friday touching intraday lows at 0.7258 following a string of upbeat U.S data sets. Having crashed through key technical supports at 0.7330 investors carried on selling the beleaguered AUD adjusting interest rate expectations ahead of this week’s monetary policy meeting minutes. The Aussie has suffered a remarkable correction throughout the last 3 weeks following softer quarterly inflation and the RBA’s decision to reverse is neutral monetary policy stance. On open the Aussie plunged lower as investors reacted to a raft of softer than expected Chinese economic indicators. Saturday saw industrial production, fixed asset investment and retail sales all fall short of market expectations raising concerns the world’s second largest economy is suffering a marked slowdown and hampered growth expectations. Attentions this week turn to the RBA’s May meeting minutes Tuesday and Thursday’s employment data. A strong employment report may bolster expectations the RBA board will abstain from cutting rates again this year an underpin losses, halting the run back toward 0.70.
New Zealand Dollar
Expected Range 0.6710 – 0.6810
The New Zealand dollar edged lower through trade on Friday following stronger than anticipated US Retail Sales and Consumer Sentiment. The Greenback advanced across the board on renewed expectations the Federal Reserve will raise rates twice throughout 2016. Touching intraday lows at 0.6760 the kiwi opens this morning marginally lower buying 0.6757 U.S Cents. Attentions this week turn to inflation expectations Tuesday ahead of Dairy price Wednesday for domestic direction and guidance ahead of key U.S inflation numbers.
Great British Pound
Expected Range 1.9600 – 1.9900
The Great British Pound edged lower through trade on Friday easing below 1.44 after stronger than expected U.S retail sales bolstered expectations the Fed will raise rate this year. Sterling suffered a steep correction Wednesday last week following comments from BoE governor Mark Carney, where in the central bank chief suggested the UK would suffer higher inflation slower growth and recession should voters choose to leave the EU next month. The comments highlighted the risks, both economic and political haunting the GBP in the lead up to the June 23 referendum. Attentions this week turn to inflation data Tuesday ahead of employment data and wage growth Wednesday as key markers for direction.
Majors
Expected Range N/A
The U.S Dollar rallied through trade on Friday touching 2 week highs against a raft of major currency counterparts following a string of upbeat macroeconomic data sets. Retails Sales and Consumer sentiment both surpassed investors’ expectations bolstering hopes the economy is rebounding from its sluggish first quarter. Retail Sales advanced 1.3% through April while more importantly core Retail Sales jumped 0.8%. When coupled with stronger than expected Consumer Sentiment investors were forced to review interest rate expectations in the hope the Fed will continues its path of interest rate normalisation. Hawkish analysts began revising the timeline or path to normalcy drawing in line with Fed guidelines and pricing in 2 rate adjustments through the end of the year. The Greenback rebounded off 18 month lows against the Yen surging through 108.50 while EUR/USD plunged to intraday lows at 1.1283 as investors absorbed a softer than anticipated quarterly growth report. Attentions this week turn to a critical U.S inflation report Wednesday as a marker for direction and affirmation a Fed policy shift is possible.