Australian Dollar:
The Australian Dollar has enjoyed a remarkable relief rally jumping over 200 points since trading opened on Monday. Stronger than anticipated first quarter growth helped fuel another upward advance and the domestic unit touched intraday highs of 0.7818 in the immediate aftermath. Investors were pricing in a 0.7% expansion while a surge in export volumes offset last month’s poor CAPEX print and helped drive growth to 0.9% through the first 3 months of the year to date. Investors looked to sell into the rally as resistance formed on approaches to 0.7820 and markets seemed reluctant to push the AUD higher ahead of Retail Sales and Trade Balance numbers due today. A strong domestic docket could be the catalyst sparking another upward run with gains likely to be capped leading into key U.S employment data Friday.
- We expect a range today of 0.7680 - 0.7880
New Zealand Dollar:
The New Zealand dollar edged lower yesterday in a mixed session wherein the local unit was manipulated by offshore data flows. A decline in ANZ commodity prices failed to spark any upward confidence and Kiwi crept lower approaching intraday lows of 0.7116 before softer than anticipated US Services data fuelled an upswing bouncing 70 points to touch 0.7183. Investors then looked to sell into the rally and squared positions leading into what promises to be a crowded global economic calendar and subsequent volatile close to the week.
- We expect a range today of 0.7020 – 0.7220
Great British Pound:
The Great British Pound was forced lower through local trade as Services data dropped sharply in May. Sterling touched intraday lows of 1.5248 before soft a U.S non-manufacturing print helped correct the downturn and Cable recouped the losses suffered in the earlier sell off. Opening this morning buying 1.5330 attentions are keenly attuned to the Bank of England and its Monetary Policy Committee meeting with investors searching for clues and forward policy guidance to drive direction.
- We expect a range today of 1.9580 – 1.9880
Majors:
The U.S Dollar suffered a second consecutive sluggish session Wednesday as investors continued to re-position Euro shorts and USD longs on increasing optimism surrounding a Greek debt deal and upbeat comments from ECB president Mario Draghi. The European Central Bank, as expected, maintained the current monetary policy stance and saw no reason to adjust its bond buying program following its monthly sojourn yesterday bolstering confidence in the current QE platform. Markets saw the call as reaffirmation that the Eurozone is moving (albeit slowly) in the right direction, a sentiment supported by a dip in the underlying unemployment rate. Touching two week highs against its US counterpart the Euro bounced through 1.1250 to peak at 1.1285. Softer than anticipated US Services data suppressed the worlds base unit while a downgrade in OECD growth expectations quashed any meaningfully relief rally as investors square positions leading into Fridays critical employment data and Non-Farm Payroll prints.
Data releases:
- AUD: Retail Sales and Trade Balance
- NZD: No Data
- JPY: 30 Year Bond Auction
- GBP: Official Bank Rate, Asset Purchase Facility and MPC Rate Statement
- EUR: Retail PMI and 10 Year French Bond Auction
- USD: Challenger Job cuts, Unemployment Claims, Revised Nonfarm Productivity q/q and Revised Unit Labour Costs q/q.
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