Greenback lower across the board

Australian Dollar:

The Australian dollar ended the week on a stronger note on Friday managing to consolidate above the US94 cent handle. The Aussie has spent the past few weeks breaching US94 cents however no gains have lasted and the higher yielding currency has always faltered soon after into the high US92 and US93 cent ranges. Taking advantage of weaker figures from the US the previous night and with no data locally for direction the Aussie slowly gained against the USD on Friday touching highs of 0.9432. Previewing the week ahead the RBA is widely expected to leave the cash rate unchanged on Tuesday at record lows. Investors however will watch the accompanying statement by governor Stevens closely which could give an indication as to the timeframe for future moves. The Aussie opens this morning stronger to begin the week at 0.9424 against the Greenback.

• We expect a range today of 0.9380 – 0.9465

New Zealand Dollar:

After initially trying to work its way down against the Greenback last week the NZ dollar has moved higher edging closer to the US88 cent mark. The US dollar has fallen lower across the board after posting a string of inconsistent data finishing the week with softer than expected GDP figures. The Kiwi on the other side of the coin showed a positive trade balance on Friday at 285 million assisting the higher yielding currency gain further against the US. This week will begin with ANZ business confidence locally for the NZ dollar on Monday however the remainder of the week will be fairly light and investors will be watching US and Chinese data closely for direction. The NZD opens virtually unchanged against the Greenback at 0.8779.

• We expect a range today of 0.8735 – 0.8815

Great British Pound:

The British Pound spent Friday consolidating its climb above the US1.7 cent threshold. A strong run of recent data from the UK along with new measures for financial stability has seen the Sterling produce a string of gains across the board increasing the growing expectations for a rate rise from the BoE by the end of the year. On Friday the UK’s GDP figures were seen to be on forecast for their strongest showing since 2007. The UK current account narrowed however not as much as expected which assisted in cushioning the Sterling’s rise. This week in the market the UK will announce private sector manufacturing PMI on Tuesday and housing prices on Wednesday. The GBP opens today stronger against the US at 1.7040. Against the higher yielding currencies the Sterling remains relatively unchanged to begin the week at 1.9409 and 1.8081 against the AUD and NZD respectively.

• We expect a range today of 1.8030 – 1.8125

Majors:

The Euro in line with the market trends managed to gain against the US dollar to end the week at 1.3649. The Greenback fell across the board with another night of less than promising data releases. Consumer sentiment numbers were positive however only slightly ahead of forecast which was not seen as enough by investors to change the markets opinion on the safe haven currency. The big data out of Europe for the evening was the German inflationary numbers. The data showed an increase of 1 per cent in June which will relieve some pressure off the ECB as they are in the midst of battling deflation across the Eurozone. Investors will now be focusing on US data at the back end of this week as numbers previously have been fairly inconsistent. Employment numbers, Trade balance figures and Manufacturing PMI will be key for direction as onlookers try and gauge the timeframe as to a potential US cash rate increase in the distant future.

Data releases:

• AUD: MI Inflation Gauge m/m, HIA New Home Sales m/m, Private Sector Credit m/m
• NZD: Building Consents, ANZ Business Confidence
• JPY: Prelim Industrial Production m/m, Housing Starts y/y
• GBP: Net Lending to Individuals m/m, M4 Money Supply m/m, Mortgage Approvals
• EUR: German Retail Sales m/m, M3 Money Supply y/y, Private Loans y/y, CPI Flash Estimate y/y, Core CPI Flash Estimate y/y, Italian Prelim CPI m/m
• USD: Chicago PMI, Pending Home Sales m/m