Currency strength assisted by a weaker Greenback

Australian Dollar:

Bolstering demand and proving to be one of this year’s most successful weeks, Asian shares rose after a combination of improved trade figures from China mixed with a positive economic assessment by Federal Reserve Chair Janet Yellen fuelled demand for currencies linked closely to the global growth story. Amid the backdrop of a weaker US dollar Australia’s currency rallied and rallied hard during late trade on Friday reaching an eventual high of 0.9042 when valued against its US Counterpart. Jumping around upon open this morning the Australian dollar currently swaps hands a rate of 0.9025. In what’s thus far been a turbulent start investors will be keeping a close on minutes from the Reserve Bank’s most recent which are due for release tomorrow.

We expect a range today of 0.8980 – 0.9060

New Zealand Dollar

The New Zealand dollar reached a one month high when valued against its US Counterpart late on Friday after a string of economic reports from the world’s largest economy fell short of expectation. Denting demand for the Greenback, figures showed US manufacturing output unexpectedly dropped in January triggering highs of 0.8383 for New Zealand’s dollar. Stronger this morning upon open at a rate of 0.8363 attention will turn to domestic happenings over the coming hours as investor’s eye quarterly retail numbers which are expected to show the level of consumer spending grew at a pace of 1.7 percent.

We expect a range today of 0.8330 – 0.8400

Great British Pound:

The Great British Pound advanced in a big way last week after the Bank of England attempted to curb expectations surrounding higher interest rates amid an economy which is rebounding at a quicker than forecast pace. Reaching highs of 1.6754 on Friday a substantially weaker US dollar has seen the majority of these gains sustained as the Sterling opens stronger this morning at a rate of 1.6741. Whilst opening virtually unchanged when valued against the Aussie (1.8536) and the Kiwi (1.9988) the Sterling’s first test this week comes ahead of key inflationary numbers which are expected to be released tomorrow keeping in mind last December marked the first time since Sept 2009 that Policy makers were able to hit their inflationary target of 2 percent.

We expect a range today of 1.8500 – 1.8570

Majors:

The US dollar retreated in a big way late last week touching its lowest level in almost one month after several figures pointed towards an economy struggling under the weight of severe weather conditions hampering recovery efforts. Whilst investors remain aware of the impact the winter weather is having on the macro environment it’s still difficult to make informed decisions given the picture is becoming an increasingly cloudy one. In the line-up of poor results on Friday US manufacturing output dropped during January recording its biggest monthly decline in more than four years. In currency moves the Greenback fell against the Japanese Yen reaching a low of 101.56 whilst the Euro was also weighed down amid continued speculation policy makers will be forced to roll out additional stimulus. Weaker this morning the Euro is currently trading at a rate of 1.3675.