Australian Dollar
Expected Range 0.7080 – 0.7280
The Australian dollar pushed through 0.72 for the first time in a month last night hitting highs of 0.7242 off the back of USD weakness. For the second day in a row the US has failed to find support after expectations of the US Federal Reserve next interest rate rise have been pushed to later in the year. Oil prices while down today has not surrendered the gains from Thursday and currently sits at $34.34 which has also helped in the recovery. The AUD has pulled back from the overnight highs to currently but 0.7201 USD. Coming up today the RBA Monetary Policy Statement and Retail Sales data which is out at 11:30am local time.
New Zealand Dollar
Expected Range 0.6650 – 0.6800
The New Zealand Dollar posted strong gains yesterday to push through 0.67 against the USD for the first time since the 5th of January recovering almost all of January’s losses in two days. Markets had been confident that the Federal Reserve would raise interest rates in the first quarter of the year it now looks like that will be pushed back to later in the year and the markets are reacting negatively to the USD. With no data out locally the NZD will take direction from overseas forces and as we open today we see the NZD at 0.6733 against the USD.
Great British Pound
Expected Range 2.0100 – 2.0410
The GBP lost ground overnight against the AUD to open this morning at 2.0261 after the Bank of England kept monetary policy on hold. With global growth slowing down and weakness in the US economy led them to decide that maintaining interest rates at 0.5% for now. The BOE Governor Carney suggested that there was no discussion to cut interest rates and that the next move more likely to be an increase rather than a cut. The GBP also lost ground against the NZD (2.1670) and the USD (1.4581).
Majors
Expected Range N/A
Weakness in the USD has meant that it has lost significant ground against the EUR, AUD, JPY and NZD over the last two days. The market is realigning its expectations around the US economy after the consensus expectations that the Federal Reserve would raise rates in the quarter of this year now looking shaky. Inflation and labour market are the two main areas that the Fed will be looking at and so the employment data out tonight will be closely monitored. During European trade Mario Draghi the European Central Bank president has said that weak global inflation is not a reason for the ECB not to act in an effort to increase growth in Europe.