Aussie drifts lower as Greenback mounts recovery

Australian Dollar:

The afterglow that followed the Peoples bank of China’s decision to reduce the Reserve Requirement Ratio was short lived and the Australian Dollar opens lower this morning trading back below 0.7750. Having advanced 2 cents in 2 weeks the Aussie touched a near one month high of 0.7844 in the early trade Monday before retreating as profit taking ahead of today’s Reserve Bank minutes and concerns surrounding a Greek default dampened risk appetite. The Australian dollar appears to have entered another holding pattern and is struggling to break outside key support and resistance levels as attentions turn to RBA Monetary Policy meeting minutes for further strategy guidance ahead of a quarterly CPI report Wednesday. A dovish Stevens may force a break in recent bullish momentum and a turn lower, however we expect some support from Tomorrow’s CPI account as analyst predict a stable print.    

• We expect a range today of 0.7580 – 0.7850

New Zealand Dollar:

The New Zealand dollar enjoyed an early morning rally Monday buoyed by the Peoples Bank of China’s decision to cut the Reserve Requirement Ratio by 1%, the biggest reduction since the Global Financial Crisis. The larger than anticipated move helped the Kiwi touch intraday highs of 0.7720 before profit taking and dampening risk appetite took hold. Last week’s USD sell off may have been slightly overdone and investors looked to square positions leading into the new week adding additional support to a Greenback recovery. With little on the domestic calendar attentions turn offshore for direction through trade on Tuesday.

• We expect a range today of 0.7580 – 0.7780

Great British Pound:

The Great British Pound edged lower yesterday as investors looked to sell Sterling to fund a Greenback relief rally. Concerns surrounding the Greek debt crisis continued to mount as the April 24 deadline looms ever closer and markets looked to extend USD long positions. In an environment wherein many Central Banks have embarked on an easing or neutral monetary policy stance the possibility of a Fed Rate adjustments continues to add support to the Greenback. Attentions turn to tomorrow MPC policy meeting minutes for further direction and guidance.

• We expect a range today of 1.9120 – 1.952

Majors:

The USD advanced across the board Monday looking to recoup the losses suffered amidst its worst weekly performance in over a month. Investors looked to shorten EURO positions as concerns Greece may default on her debts continue to escalate. The new Syriza government is yet to proffer an acceptable reform policy and as the April 24 deadline is fast approaching there is a sense of mounting anxiety as the threat of a Grexit looms ever larger. Weighed down by the Greek crisis and the ECB bond buying program the euro slipped below 1.0750 as attentions turn to German ZEW Economic Sentiment for direction and guidance through trade on Tuesday.

Data releases:

• AUD: RBA Governor Stevens Speaks and Monetary Policy Meeting Minutes Released
• NZD: No Data
• JPY: No Data
• GBP: 30 Year Bond Auction
• EUR: German ZEW Economic Sentiment
• USD:No Data