Australian Dollar:
Given finally some signs of a brightened outlook from the world’s largest economy overnight, the Australian dollar has struggled to maintain its worth when valued against its US Counterpart. Failing to keep its head up above the 80 US Cents level, the higher yielding asset contracted to a low of 0.7863 before steadying to open this morning close a full cent lower at a rate of 0.7916. Whilst there remains a few notable data points on the horizon today including quarterly PPI and manufacturing PMI from China, this week’s closing level remains an important one leading into next week’s Reserve Bank policy meeting in which investors have priced in a 60 percent chance of further monetary easing.
We expect a range today of 0.7850 – 0.7960
New Zealand Dollar:
Having notched up a big tumble upon open yesterday morning following the RBNZ’s decision to remove any reference of future monetary tightening, the New Zealand dollar has since traded within a one cent when valued against its US Counterpart. Generally struggling in the face of improved data flows from the US, lows of 0.7574 were countered by a high of 0.7675. Looking ahead today economic announcements from China are expected to take centre stage as the Kiwi opens weaker this morning buying 76.27 US Cents.
We expect a range today of 0.7580 – 0.7660
Great British Pound:
Halting a three day advance the Great British Pound has been bought into line following a mild bounce in the US dollar which has been out of favour this week. Running out steam on advances towards the 1.55 mark the Sterling’s trajectory from here will depend greatly on the momentum of the world’s largest economy and with it the ability of the Greenback to regain its upward trend. Lower upon this morning the Pound currently swaps hands at a rate of 1.5351 versus the US dollar, whilst stronger against the Aussie (1.9389).
We expect a range today of 1.9340 – 1.9450
Majors:
A US labour market department report overnight showed that the number of American’s filling for unemployment benefits plummeted to the lowest level in 15 years whilst another report indicated labour costs had advanced by 0.7 percent last quarter, a positive result for broader inflation. Following a weak economic performance during quarter one which only delivered a GDP expansion of 0.3 percent, last night’s positive batch of data has been well received by market participants. Having sunk to a nine-week low earlier in the session the US dollar whilst marginally stronger this morning still appears truly hamstrung by the shift in expectations which now sees the US Federal Reserve holding rates until at least the final quarter of this year. In other developments the 18-nation euro has managed to reach a nine-week high against the dollar (1.1266), buoyed by broader Greenback weakness. On the outlook today manufacturing data from the US and the UK remain the pick of the highlights this evening.
Data releases
AUD: PPI q/q
NZD: No data today
JPY: Household spending y/y, Tokyo Core CPI y/y
GBP: Manufacturing PMI, Net Lending to individuals
EUR: French, Germany and Italian Bank holiday
USD: ISM Manufacturing PMI, Revised UoM Consumer Sentiment
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