AUD steady ahead of busy week

Australian Dollar:

All in all it was a positive end to the month of May for the Australian dollar which managed to close up above the 93 US Cents handle on Friday, a mere 0.2 percent away from its highest level in 4 weeks.  With equity markets worldwide rising for a fourth consecutive month amid signs of renewed economic growth, markets are gearing up for an action packed week ahead starting today given the expected the release of Building approval numbers followed by the RBA rate statement tomorrow. Having continuously struggled on approaches towards the 94 US Cents mark, short-term support can be sighted around 0.9250. Virtually unchanged this morning the Australian dollar currently buys 93.07 US Cents.  

• We expect a range today of 0.9270 -0.9330 

New Zealand Dollar:

Despite figures on Friday which showed building consents issued for residential housing, not including apartments fell by 5.2 percent in April the New Zealand dollars reaction was overall muted re-enforcing the view the extended Easter Break will have a negative impact on the number. Having traded between a low 0.8471 and a high of 0.8515 when valued against its US Counterpart a bank holiday locally and in China today should see ranges remain relatively tight today ahead of key economic releases from the US this evening. Opening at a similar level to where we left it the Kiwi buys 84.85 US Cents.

• We expect a range today of 0.8450 – 0.8520

Great British Pound:

On Course to carve out an even higher high the Great British Pounds maintained an upward trajectory on Friday supported by investors who believe the Bank of England have shown a greater willingness to normalize monetary policy sooner rather than later. Ahead of the key interest rate decision this Thursday, the Sterling remains vulnerable with Manufacturing PMI and Construction PMI to come firstly over the coming days. Having enjoyed a strong session on Friday in which the Sterling rallied across the board the Great British Pound has locked in some solid gains when valued against both the US dollar (1.6765), the Aussie (1.8001)and the Kiwi (1.9745).

• We expect a range today of 1.7970 – 1.8030

Majors:

Given the large degree of cheap liquidity still on offer by the world’s largest central banks, markets have remained diluted over the past month with the end result being record low levels of volatility. In a month dictated by a weaker Euro which lost more than 3 US Cents, declining against 14 of its 16 major counterparts amid bets of further stimulus from the ECB, all eyes and ears will be focused on ECB President Mario Draghi this Thursday where at the very least its expected a rate cut will be forthcoming. Stronger compared to levels seen on Friday the shared unit currently swaps hands at a rate of 1.3633. In other notable currency moves the Japanese Yen remains in favour with investors who have been more comfortable in picking up the safe haven unit as Policy makers continue to see an inflation number heading in the right direction. Marginally stronger this morning at 101.826 the week ahead promises a lot given Monetary Policy statements from the RBA, BOC, BOE and ECB.

Data releases

• AUD: AIG Manufacturing Index, Building Approvals m/m
• NZD: Bank Holiday
• JPY: Final Manufacturing PMI
• GBP: Manufacturing PMI, Net Lending to Individuals m/m
• EUR: Spanish Manufacturing PMI
• USD: ISM Manufacturing PM, Treasury Sec Lew Speaks