Australian Dollar
Expected Range 0.7140 – 0.7220
In what proved to be one of the most volatile starts to the year on record, investors have been spooked over the past 24 hours as global stock markets tanked. Triggering large and aggressive shifts into traditional safe have assets, the Australian dollar having started the day at 73 US Cents plummeted to an eventual low of 0.7155 when valued against its US Counterpart. Driven lower also by disappointing economic reads from both China and the United States, share market moves were so abrupt in China, a trading halt was eventually imposed. In what’s been an electrifying start to 2016 the Australian dollar opens weaker this morning buying 71.81 US Cents.
New Zealand Dollar
Expected Range 0.6710 – 0.6790
The Dow Jones Industrial average dropped by a staggering 375 points overnight, as China’s stock market rout spread around the globe. Fuelling fresh concerns over the state of the global economy initial sell signs started to appear off the back of a disappointing purchasing manager’s index in China, showing a notable contraction for the month of December. In the context of a number negatives overnight, market moves were violent and widespread effecting in particular growth linked and emerging market currencies. Recovering slightly from an overnight low of 0.6719 when valued against its US Counterpart the New Zealand dollar opens notably lower this morning as it currently buys 67.48 US Cents.
Great British Pound
Expected Range 2.0410 – 2.0550
In figures released overnight growth in the manufacturing sector slowed further during the back end of 2015 with Decembers Manufacturing PMI Index falling short of expectation. Opening 20 basis points lower when valued against its US Counterpart this morning at a rate of 1.4712, whilst lower the Sterling has been somewhat insulated from the global share market rout overnight. Struggling still to advance given the strong presence of a bullish Greenback, investor’s plight to safety sees the Sterling open stronger versus the Australian Dollar (2.0482) and the New Zealand dollar (2.1795).
Majors
Expected Range N/A
On course for its worst start to the year since the Great Depression, Wall Street capitulated overnight after weak economic data from China, the world’s second largest economy, sparked widespread selling amid a whitewash amassing to a seven percent fall. Whilst China set the mood, the hits kept on coming overnight after US data also showed factory activity unexpectedly shrunk in December, slumping to a three month low. Benefitting from some quality haven flows the Yen strengthened one percent touching its highest level since mid-October. With the US dollar also outperforming many of its peers, investor’s preference for safe-haven moves has also been accelerated by heightened tensions between Saudi Arabia and Iran with Saudi Arabia announcing that it would cut its diplomatic ties. In an environment dictated by risk-off plays some positive macro releases over the coming 24 hours will be necessary to right an increasingly shaky looking ship.