Aussie bolstered by stable inflation report

Australian Dollar:

The Australian dollar advanced throughout trade on Wednesday as the quarterly Consumer Price Index report showed a marginal increase in price pressures. Both core and traditional CPI measures wrote in at the top end of analysts’ expectations printing 0.6% and 0.2% respectively.  The stable read puts core year on year inflation within the RBA’s target range between 2%-3% and pares expectations of a Central Bank rate adjustment next month. The net effect; the Aussie rallied back through 0.77 touching intraday highs of 0.7807 with added support stemming from overall Greenback weakness. Technical resistance pressures took hold again on levels above 0.78 as investors sold into the rally leading the AUD lower and we open this morning buying 0.7756 U.S Cents. Attentions turn offshore today with direction stemming from HSBC Chinese Manufacturing PMI.

• We expect a range today of 0.7580 – 0.7850

New Zealand Dollar:

The New Zealand Dollar enjoyed a mixed session Wednesday advancing to intraday highs of 0.7737 before investors sold into the rally. Stronger than anticipated U.S existing home sales helped fuel a Greenback relief run and much of the days early gains were relinquished. Edging lower throughout North American trade the NZD opens this morning buying 0.7646 U.S cents as attentions turn offshore again to Chinese HSBC Manufacturing PMI as the primary directional driver through Thursday.

• We expect a range today of 0.7580 – 0.7780

Great British Pound:

The Great British Pound moved back through the psychological 1.50 barrier throughout trade on Wednesday advancing on the back of the Bank of England’s release of its April policy meeting minutes. The monthly account of MPC (Monetary Policy Committee) discussions held a somewhat hawkish tone with a small portion of committee members noting the risk of a faster than anticipated rise in inflation. The suggestion that a rate adjustment may come sooner than currently anticipated helped Sterling rally through to intraday highs of 1.5079 as attentions now turn to Retail Sales and Public Sector borrowing for direction through trade today.    

• We expect a range today of 1.9200 – 1.9620 

Majors:

The world’s base currency enjoyed a mixed session on Wednesday as a two day rally was halted in early trade. The Greenback moved lower as the Euro rallied on news the ECB raised the cap on its Emergency Liquidity Assistance by 1.5 billion Euros. The announcement eased concerns and fears of a Grexit as Eurogroup ministers meet Friday to persuade and reach a reform commitment from the new Syriza government. The shared unit advanced through 1.08 touching intraday highs of 1.0801 before a stronger than anticipated U.S home sales data print. Home sales jumped 6.1 percent in March fuelling speculation the Federal Reserve may soon hike rates. The strong read added support to a mixed set of macroeconomic indicators and helped rebuild some confidence in the domestic economic recovery. Markets and investors are becoming increasingly sensitive to changes in fundamental indicators that could sway Fed policy decisions and attentions now turn to European Manufacturing and Services data Thursday and U.S Core Durable Goods Orders Friday for direction into the weekly close.

Data releases:

• AUD: NAB Quarterly Business Report
• NZD: Visitor Arrivals and Credit Card Spending y/y
• JPY: Flash Manufacturing PMI
• GBP: Retail Sales and Public Sector Net Borrowing
• EUR: French Flash Manufacturing and Services PMI, Spanish Unemployment, German Flash Manufacturing and Services PMI and Eurozone Flash Manufacturing and Services PMI.
• USD: New Home Sales and Flash Manufacturing PMI