US dollar out muscles its rivals

Australian Dollar:

The Australian dollar declined yesterday given the prospect of softer growth from the world’s second largest economy. With data from China showing that credit growth slowed in China the drop in the supply of new loans demonstrate a tightening in monetary policy conditions. Falling from an opening level of 0.8963 when valued against its US Counterpart lows of 0.8886 came into play overnight with better than expected data flows from the US leading to a much stronger Greenback. Weaker this morning as is clings to the 89 US Cents mark investors will be looking towards local employment figures today where its forecast the underlying unemployment rate will remain close to its four year high of 5.8 percent.

• We expect a range today of 0.8860 – 0.8950

New Zealand Dollar:

Amid renewed speculation that the RBNZ will look to raise interest rates this year, becoming the first Central Bank in the developed world to do so in an attempt to curb rising house prices, the New Zealand dollar has been in demand this week touching and eight-year high when valued against its trans-Tasman rival yesterday. Ahead of Australian employment figures due out today the kiwi rose as high as 0.9396 stopping just short of its next major level of 0.9400. Weaker this morning against the Greenback at a rate of 0.8332, 0.4 percent has been wiped off the NZD/USD rate given a raft of improved data flows from the world’s largest economy.    

• We expect a range today of 0.8300 – 0.8360

Great British Pound:

In what has thus far been a choppy week of trade for the Great British Pound, UK stocks which advanced yesterday to their highest level since May failed to provide much support for Britain’s currency. Dropping to a session low of 1.6321 when valued against its US counterpart, US dollar strength has kept the Sterling in check overnight despite comments from BOE Governor Mark Carney who said Policy Makers expected Britain’s property market to maintain its upward momentum through to the middle of 2015. Whilst weaker this morning against the Greenback at 1.6371 the Sterling is stronger against both the Aussie 1.8375 and the Kiwi 1.9641.

• We expect a range today of 1.8330 – 1.8420

Majors:

Whilst maintaining her cautious stance International Monetary Fund Managing Director Christine Lagarde urged policy makers globally to fight the risks of deflation which threaten to derail recovery efforts. In what proved to be a generally positive report for the IMF Lagarde stated that the world’s economies had finally turned the corner raising her forecast for global growth amongst the richest nations in 2014 from 2 to 2.2 percent. Continuing its upward trend this week the US dollar has appreciated when valued against a handful of its major pairs overnight after an Index of manufacturing activity in New York surpassed expectation. Whilst figures also showed wholesale prices in the US climbed for the first time in the 3 months the dollar’s strength when valued against the Japanese Yen has been there for to see opening stronger once again this morning at 104.629. In other moves the Euro struggled to keep pace opening lower at a rate of 1.3593.

Data releases

• AUD: Unemployment Report
• NZD: No data today
• JPY: Core Machinery Orders m/m, Tertiary Industry Activity m/
• GBP: No data today
• EUR: ECB Monthly Bulletin, CPI y/y, Core CPI y/y
• USD: Core CPI m/m, Unemployment Claims