Australian dollar consolidates last week's gains

Australian Dollar:

The Australian dollar opens this morning remarkably 2 US Cents stronger than its lowest point last week at a rate of 0.9244 when valued against its US Counterpart. Whilst Asian stocks posted their biggest weekly advance in almost a year, investors have snapped up the domestic unit with policy makers seemingly happy to pass up the opportunity of talking down the higher yielding asset. Given ranges tightened late last week, already there is a sense that investors have opted to sit on the sidelines in anticipation of a busy week of economic releases. High on the agenda over the coming days remains the RBA’s policy statement tomorrow as well as a key manufacturing PMI reading from China.

We expect a range today of 0.9200 – 0.9280

New Zealand Dollar

Whilst the New Zealand dollar opens 0.2 percent lower this morning at rate of 0.8650 when valued against its US Counterpart, in the context of where it has been over the course of the past week it remains robust and close to its recent two and a half year high. With the week ahead likely to bring a slightly different set of challenges for the Kiwi the focus is to set circulate around the growth stories throughout the world’s largest and second largest economies. Of key importance over the coming 24 hours will be a speech expected from US Federal Chair Janet Yellen who has the opportunity to shed further light on when US interest rates will start to rise. Running into stiff resistance on the topside a short term line has been drawn on approaches towards the 87 US Cents mark.

We expect a range today of 0.8620 – 0.8690

Great British Pound:

The economic numbers produced a mixed message regarding the health of Britain’s economy on Friday after one report showed quarterly GDP had matched the forecasted read of 0.7 percent whilst another report showed the UK had produced a much larger than expected fourth quarter current account deficit, raising questions over the sustainability of Britain’s economic recovery. Despite the clouded economic outlook the Great British Pound advanced late last week reaching a peak on Friday of 1.6650 when valued against its US Counterpart. Stronger this morning the Sterling is firmer against the Greenback (1.6650), the Aussie (1.7982) and the Kiwi ()

We expect a range today of 1.7940 – 1.8020

Majors:

Amid ongoing speculation that the Chinese government will implement additional stimulus in a bid to spur further life into the world’s second largest economy, the US dollar did well to appreciate late last week given the global back drop which generally favoured riskier assets. With the Greenback snapping a five-day slump figures released on Friday showed consumer spending throughout the US is heading in the right direction, increasing calls for the US Federal Reserve to turn off the cheap money tap earlier. Stronger this morning against the Japanese Yen at a rate of 102.809, the Euro also opens stronger at a rate of 1.3751. Looking ahead this week and the economic calendar is littered with key risk events highlighted by central bank meetings in Australia and the UK as well as the all-important non-farm payroll report in the US.