USD slips lower ahead of FOMC policy announcements

AUD / USD

Expected Range: 0.7630 - 0.7830

Australian markets were closed Monday in observance of ANZAC day ensuring limited liquidity and thin volumes through much of the domestic session. The AUD maintained a tight trading band bouncing between intraday lows at 0.7691 and session highs at 0.7712 before European and North American trading commenced adding some muscle to an otherwise flaccid trading day. General USD weakness and profit taking helped the AUD bounce of supports at 0.7703 and hold onto gains above 0.77 touching intraday highs at 0.7728. With little domestic data on hand to drive direction through Tuesday investor focus will shift to US Durable goods orders ahead of key local inflation numbers Wednesday as markers for direction. 

NZD / USD

Expected Range: 0.6780 - 0.6930

New Zealanders enjoyed an extended weekend in observance of ANZAC day ensuring market volumes remained thin and liquidity limited. The NZD bounced about a tight trading bracket, struggling to move outside a 25 point range through much of the domestic session before European and North American traders injected some spice to an otherwise bland trading day. The Kiwi bounced higher on general USD weakness and profit taking touching intraday highs at 0.6878. Attentions today turn to U.S macroeconomic data for direction as the domestic docket remains free of headline news. 

GBP / AUD

Expected Range: 1.8620 - 1.8920

Politics has dominated GBP direction of late and Sterling held onto gains earned in the wake of the latest opinion polls suggesting voters would elect to remain within the European Union. General USD weakness and profit taking ahead of Wednesday’s FOMC meeting and policy announcement helped extend recent gains and cable touched intraday highs at 1.4514. Attentions now turn back to macroeconomic indicators with preliminary 4th quarter GDP number due Wednesday. 

USD, EUR, JPY

The U.S dollar slipped lower, giving up gains as investors looked to pare positions ahead of key Central Bank policy announcements. Both the Federal Reserve and Bank of Japan are due to convene this week and investors will be keenly attuned to the tone of rhetoric and delivery of monetary policy platforms as markers for direction. There is an expectation the BoJ may look to extend deeper into negative interest rates in a bid to stimulate lending and domestic growth. Such a move would ordinarily deflate the currency but markets and analysts are seemingly of the opinion the BoJ can do little to revive the economy and such a move is unlikely to have a longer term impact. Instead investors will look to a Dovish Federal Reserve for affirmation the current accommodative monetary platform will hold. The Fed is likely to reiterate its commitment to patient interest rate adjustments, adding additional pressure to an already bearish Greenback outlook. The USD fell back through 111.50 through trade on Monday while the Euro rebounded to touch session highs at 1.1277. Attentions today turn to U.S durable goods orders as a marker of domestic economic health.