Australian Dollar:
The Australian Dollar resurgence continued yesterday as broader Greenback weakness continues in the wake of Friday’s disappointing Non-Farm Payroll numbers. NAB business confidence remained stable and the AUD climbed slowly throughout the domestic session before surging higher and breaking previous resistance levels to hit intraday highs of 0.9366. With consumer sentiment numbers due today and employment data Thursday strong readings may see previous resistance levels around 0.93 turn into points of support. With plenty of domestic and offshore stimuli available to close the week investors will be keenly watching the US FOMC meeting minutes and key Chinese data events for further direction.
- We expect a range today between 0.9300 – 0.9400
New Zealand Dollar:
The New Zealand Dollar continues to take advantage of broader US weakness moving back above 0.8650 throughout trade yesterday. In a domestic session free of headline data surprises the Kiwi was at the mercy of offshore stimuli. Stronger UK Industrial and Manufacturing Production and a halt in the expansion of stimulus by Japans central bank saw the Kiwi fall against its British and Japanese counterparts, while the dissipation of quantitative easing threats within the Euro Zone and expectations of improving consumer sentiment in Australia saw the currency unit fall against the Euro and AUD respectively. The local economic docket is again quiet and kiwi traders will look to the US FOMC minutes for further direction moving into key Chinese data events on Thursday and Friday.
- We expect a range today between 0.8610 – 0.8710
Great British Pound:
The Great British Pound rallied strongly yesterday reaching intraday highs of 1.6755 as investors took advantage of overall US weakness and stronger UK domestic data. The Cable broke above 1.67 for the first time since early March and recorded its biggest daily advance since February twelve as both Manufacturing and Industrial Production numbers comfortably beat economists’ expectations. The reading serves as a timely reminder the UK recovery is progressing ahead of plan with the Bank of England and its Monetary Policy Committee set to meet Thursday. Investors will be keenly watching the MPC rate announcement and accompany statement for any hint of when the BoE may hike interest rates or bring forward its currency monetary policy plan. Sterling opens this morning at 1.6748 against its US counterpart while swapping hands at 1.9310 and 1.7882 against the Kiwi and AUD respectively.
- We expect a range today between 1.7830 - 1.7950
Majors:
The fallout from Fridays weaker than expected US employment data continued throughout trade on Tuesday as a broader downward trend appears to be emerging. In what was a second consecutive day of decline the Greenback lost ground against most of its major trading partners while the Euro surged higher as speculation the European Central Bank (ECB) is set to ramp up stimulus measures were somewhat dispelled by a mix of comments from ECB officials. The Euro rally touched intraday highs at 1.3812 before a marginal pull back below 1.38 as markets seem reluctant to push the bloc unit higher. The ECB has made it abundantly clear it will not tolerate and inflated currency and moves toward 1.40 will likely evoke a response. Further US weakness was seen against the Japanese Yen as the Bank of Japan (BoJ) failed to add to its current stimulus package as was largely expected. BoJ Governor Kuroda offered little forward guidance and/or suggestion that additional monetary easing would be adopted in the short term and the decision has been seen as largely Yen supportive. The Greenback plunged below 102 to an intraday low of 101.56 before stabilising late into the North American session. Investors attentions will largely turn to the Federal’s Reserves March meeting minutes due today for any guidance or changes in Fed policy as a marker for USD direction.
Data releases
- AUD: Westpac Consumer Sentiment and Home Loan Approvals m/m
- NZD: No Data
- JPY: BoJ Monthly Report
- GBP: Trade Balance and BRC Shop Price Index y/y
- EUR: German Trade Balance
- USD: FOMC Minutes, 10 year Bond Auction and Crude Oil Inventories
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