Australian Dollar
Expected Range 0.7580 – 0.7710
The Australian Dollar hit 9 month highs after briefly pushing through 77 cents against the USD last night. The market still reacting to Yellen’s speech which dampened expectations around the speed in which the Fed was going to raise interest rates. The change in expectations has meant that the AUD has become more appealing option as the higher yielding currency. However the strong AUD will now put the focus back onto the Reserve Bank of Australia’s decision next week to see if they will look to reduce interest rates in the hope of bringing the AUD down to a level they would prefer. The AUD is currently buying 0.7668.
New Zealand Dollar
Expected Range 0.6850 – 0.7000
The New Zealand Dollar has continued its good run this week against the USD to open this morning up 3.5 cents from Monday’s open. The main focus of yesterday was the speech by the Fed Chair Janet Yellen where she surprised the market with her dovish tone around the expectations for the interest rate movement in the US. She said that the Fed would be cautious when increasing rates because of risks in the global economy. The speech has meant that the USD has performed poorly against most of the major currencies across the last 24 hours and has seen the NZD reach levels not seen since June of last year. It opens this morning at 0.6928.
Great British Pound
Expected Range 1.8600 – 1.9000
The Great British Pound has lost ground against the AUD over the last 24 hours most of it off of a strong Australian Dollar. The speculation around when the next rate hike will be and the more that date gets pushed back has given the AUD some short term support. The GBP is also continues to be weighed down by the ongoing debate about a potential exit from the Eurozone and with news that Tata Steel will be looking at selling its Steel mills in the UK which employ 15,000 people. Today the market will be looking at Bank of England Governor Carney to see his reaction to the Janet Yellen’s speech and how it will affect the UK. The Current Account will also be released today. The GBP is currently buying 1.8745 AUD.
Majors
Expected Range N/A
Janet Yellen’s speech continued to weigh on markets through most of Tuesday after the market continued to look for clues as to what it meant for the monetary policy in the US. Speculation has meant that the market has not priced in a rise during their April Meeting but also the possibility of a rate rise has been reduced as well. It is an interesting time for the Federal Reserve as it tries to navigate its way through difficult global economic conditions and from Yellen’s speech mentioning the word “risk” 19 times she has emphasized that their are a lot of factors that they need to take into consideration.