Aussie falls off the back of soft CPI figures

Australian Dollar:

Weak CPI data released yesterday has resulted in the local currency losing ground against its major counterparts throughout yesterday’s trade session. With expectations set at a 0.8% increase in inflation over the 2nd quarter of 2015, the result trailed forecasts and printed at only 0.7%. This outcome removes speculation of any rate hikes in the near future for investors, and also resulted in the AUD/USD reach overnight lows of 0.7358. With no domestic data scheduled for release today the Aussie will look overseas for direction. The AUD/USD starts today at 0.7376.

• We expect a range today of 0.7340 – 0.7420

New Zealand Dollar:

The NZ Dollar has rallied this morning following a Reserve bank’s decision to cut rates by 25 basis points to 3.00%. The Kiwi found support off the back of several comments made by RBNZ Governor Wheeler during his address as he mentioned that the currency decline and lower interest rates have led to easier monetary conditions. It was also highlighted that currency depreciation will be providing support to both import and export sectors, and is necessary while taking into account weak commodity process. The NZD saw highs of 66.48 US cents, and opens this morning at NZD/USD 0.6624.

Great British Pound:

The Pound Sterling gained ground against the Greenback, and other major counterparts yesterday as the Bank of England minutes released hinted that some policy makers are leaning towards the possibility of voting for a rate hike in the near future. It was outlined that the ongoing uncertainty surrounding Greece debt and China’s current financial market situation made the decision for a rate hold no issue, however if these external factors has not been nearby then the rate decision may not have been as definite. BOE Governor has also implied that a rate hike may come to fruition towards the end of 2015. The GBP/USD commences trade today at 1.5614.

• We expect a range today of GBP/AUD 2.1110 – 2.1190

Majors:

The EUR/USD has dropped overnight with positive home sales data in the US being a contributing factor. It was revealed that during the month of June the number of residential buildings sold was 5.49 million which shot over expectations of only 5.40 million, and highlighted a favourable picture for the current state of the US economic recovery. The EUR/USD fell to overnight lows of 1.0875 and opens trade this morning at 1.0927. Regarding economic announcements today we have US unemployment claims upcoming, as well as the Greek Government Debt Crisis Vote where the Greek parliament will make a decision on a second package of requirements for further financial assistance. Both announcements will look to have a significant impact on the currency pair.

Data releases:

• CAD: Core Retails Sales m/m, Retails Sales m/m
• CNY: CB Leading Index m/m
• EUR: Greek Gov Debt Crisis Vote, Spanish Unemployment Rate, Consumer Confidence, German Buba President Weidmann Speaks
• GBP: Retails Sales m/m, BBA Mortgage Approvals
• JPY: Trade Balance
• NZD: Official Cash Rate, RBNZ Statement
• USD: Unemployment Claims, CB Leading Index m/m, Natural Gas Storage