Soggy US Growth helps bolster AUD

Australian Dollar:

The Australian Dollar pushed upward into the close on Friday breaking back above 0.78 and touching session highs of 0.7835. With little of consequence on the domestic economic docket direction came from offshore stimuli and Greenback weakness as another set of poor macroeconomic indicators weighed on the world’s base currency. A seventh successive month of declining Core Durable Goods Orders comes on the back of softer than anticipated retail sales, housing starts and unemployment claims and adds additional pressure to what is becoming a sluggish growth story. Despite USD weakness investors seem content to sell into rallies and resistance has formed on approaches of 0.7850. Attentions will turn to Wednesday’s FOMC rate statement and Fed rate announcement for further direction and perhaps the catalyst to push the AUD outside recent ranges.    

• We expect a range today of 0.7630 – 0.7850

New Zealand Dollar:

The New Zealand dollar edged higher on Friday recouping some of the losses suffered following Deputy RBNZ governor McDermott’s comments Thursday as Greenback weakness followed another poor macroeconomic data print. Core durable goods orders fell for the seventh consecutive month on Friday giving U.S Federal Reserve policymakers more reasons to maintain the current near zero interest rate and accommodative policy stance. Touching intraday highs of 0.7605 Friday the kiwi opens marginally lower this morning buying 0.7595 U.S Cents.

• We expect a range today of 0.7480 – 0.7680

Great British Pound:

The Great British Pound touched 6 week highs on Friday despite mounting political uncertainty as polls reveal the upcoming general election is too close to call. Touching intraday highs of 1.5186 Cable looks primed to take out 1.52 as USD weakness intensifies. Attentions now turn to Tuesday’s preliminary quarterly GDP report ahead of Wednesday’s crucial U.S Federal Reserve rate announcement as the primary drivers governing direction through the week ahead.  

• We expect a range today of 1.9220 – 1.9620

Majors:

The U.S Dollar moved lower into the weekly close after a decline in corporate spending plans dampened analyst economic outlook and extended the timeline of expectation surrounding a Federal Reserve rate adjustment. Planned business spending in the form of Core Durable Goods orders fell for the seventh consecutive month adding yet another question mark to an already wobbly growth story. Speculators are beginning to wind down positive bets on the worlds base currency as net long positions fell for a fourth successive week touching their lowest level in 7 months. The Greenback sell off helped fuel a Euro rally as the 19 nation bloc unit moved through 1.0850. Touching two week highs of 1.0892 the advance faded as Eurogroup finance ministers refused to offer additional Greek aid until acceptable reform measures were tabled. Talks again broke down over the weekend between Greek Finance Minister Yanis Varoufakis and Creditors and the suggestion of a Plan B in the event of a Greek default are beginning to emerge. With little driving macroeconomic direction through trade on Monday attentions turn to Consumer Confidence Tuesday ahead of Wednesdays crucial Fed Rate announcement and FOMC statement.  

Data releases:

• AUD: No Data
• NZD: Bank Holiday
• JPY: No Data
• GBP: CBI Industrial Order Expectations 
• EUR: German Import Prices m/m
• USD: Flash Services PMI