US dollar lifts on strong numbers

Australian Dollar:

The Australian dollar opens this morning lower to start the week buying US93.24 cents after losing a quarter of a per cent on Friday. The Aussie began waiting on Private sector credit from the RBA and the numbers released just before midday disappointed. The figures were shown to increase less than anticipated however the market shrugged off the data. The losses took place overnight when strong US numbers coupled with continuing geopolitical concerns bolstered the US dollar. Looking at the week ahead Monday should be a slow start with a bank holiday in the USA however Tuesday the RBA will announce the cash rate which is widely expected by the majority of the market to be held.

• We expect a range today of 0.9280 – 0.9360

New Zealand Dollar:

The Kiwi dollar faded away against the US to end the week as ANZ business confidence and building consents failed to impress. The weak data coupled with geopolitical tensions and strong US numbers saw the safe haven Greenback strengthen across the board as the Kiwi opens this morning weaker at 0.8351. This was the sixth month in a row business’s confidence waned which is a result of the stronger currency, higher interest rates and struggling trade. Looking ahead to the week investors will be expecting a slow start with a bank holiday in the USA however a myriad of Chinese manufacturing data should provide much needed volatility for the NZ dollar which will lack domestic numbers this week.

• We expect a range today of 0.8310 - 08390

Great British Pound:

The British Pound shrugged off geopolitical events and impressive US numbers which have strengthened the Greenback across the board and has crept higher after the change in the selling prices of homes increased by 0.8 per cent, 0.7 per cent more than anticipated. Consumer confidence was also up on forecast which is a strong sign for the UK economy whose economic data has come under scrutiny after underperforming over the last few weeks. The Bank of England is being watched closely as investors are looking for signs as to the time frame of the widely anticipated interest rate increase. Against the higher yielding currencies the Sterling similarly gained opening this morning to open at 1.7796 and 1.9865 against the AUD and NZD respectively. Looking to the week ahead Thursday’s official bank rate will be the highlight of the week as the Bank of England will set the cash rate.

• We expect a range today of 1.7750 – 1.7840

Majors:

Whilst numbers out of Europe outperformed on Friday they were not enough to stop the Greenback’s gains as the US posted their own impressive numbers with geopolitical events also further weighing on broader risk sentiment. In European trade the Euro found momentum underpinned by inflation on forecast. Following the strong release expectations surrounding further accommodative measures have been wound back in the lead up to this week’s European Central Bank meeting. The combination of the crisis in the Ukraine and positive US results later on saw the US fight back and open half a cent stronger against the Euro. US Consumer sentiment and the Chicago PMI numbers lead the way surpassing expectations. The robust releases are a good sign for the US economy and are pointing to the time frame to an interest rate increase being closer than previously anticipated. The coming week should begin slowly with Labour Day in the US however a heavy economic docket should bring volatility back into a recently quiet market.