Australian Dollar:
Demand for the Australian dollar was bolstered yesterday after a NAB Business Confidence read comfortably surpassed expectations for the month of June. Rising two points to 10 a softer Greenback over the past 24 hours has also greatly assisted the Aussie which opens higher this morning at a rate of 0.7449 when valued against its US Counterpart. In what’s shaping up as important session today, short-term direction is likely to be dictated by a raft of key economic developments from China. Sitting on top of that list will be China’s GDP print which is expected to show the world’s second largest economy to have expanded by 6.9 percent on an annualised basis during the second quarter of this year.
We expect a range today of 0.7400 – 0.7500
New Zealand Dollar:
The New Zealand dollar has strengthened when valued against its US Counterpart overnight after US retail sales during June fell short of expectation, triggering a move away from the world’s reserve currency. Rallying to a late session high of 0.6742 risk barometers have significantly improved during the early parts of this week with Asian equity markets stabilising somewhat following the carnage of the past three weeks. Buying 67.09 US Cents upon open this morning direction for the Kiwi today will be driven by GDP and Industrial production prints from China.
We expect a range today of 0.6660 – 0.6750
Great British Pound:
In the wake of a disappointing inflation report which showed a zero percent increase in CPI over the past 12 months, UK markets hardly had to digest the lacklustre result following comments from the Bank of England Governor Mark Carney. In a testimony to UK lawmakers overnight Mr Carney said the time for an interest rate increase is moving closer communicating in an upbeat tone when discussing the UK’s economic performance. Triggering some notable moves in the Sterling the Great British Pound open one and half cents stronger when valued against its US Counterpart (1.5633) whilst opening higher also when valued against the Australian dollar (2.0981) and the New Zealand dollar (2.3297).
We expect a range today of 2.0940 – 2.1030
Majors:
The US dollar Index a measure of the Greenback against a basket of currencies has fallen overnight amid signs of economic weakness within the world’s largest economy. With retail sales unexpectedly falling in June, softer labour market numbers have also contributed to lower expectations which surround talks over US interest rate hikes. Suggesting slower momentum during the back end of quarter two, a very weak quarter one has already triggered some notable re-assessments of growth forecasts for 2015. Whilst the Greenback is lower this morning, so too is the 18-nation euro following a leaked IMF study which showed Greece will require a great deal more debt relief than European governments have to date offered as creditors face the prospect of having to give the heavily indebted nation a 30-year grace period on debt servicing. With so much of the euros direction tied to the Greek PM’s ability to push the latest debt agreement through parliament, an outcome over the coming 48 hours is expected. This morning the Euro is steady as it clings to the 1.10 mark.
Data releases
AUD: Westpac Consumer Sentiment
NZD: Trade Balance
JPY: Monetary Policy Statement, BOJ Press Conference
GBP: Average Earnings Index 3m/y, Claimant Count Change
EUR: Eurogroup meetings
USD: Fed Chair Yellen testifies, PPI m/m, Empire State Manufacturing Index, Capacity Utilisation Rate, Industrial Production
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