The Australian dollar enjoyed another strong week against its US Counterpart, well supported by stronger than expected retail sales as well as the June Trade Balance which showed an unexpected small surplus. Combined with a string of solid domestic readings the higher yielding unit remained in favour with investors overnight Friday as economists were left surprised by the strength of US payrolls data which showed 163 000 jobs were created in the month of July. Rallying to an overnight high of 1.0570 against its US Counterpart, a consolidation above the 1.0550 level may create space for further upside. In what is shaping up as another very busy week across markets, investors eyes will be closely monitoring the RBA Interest Rate decision tomorrow followed by Labour Markets figures Wednesday. Meanwhile this morning the Aussie dollar opens more than a full US Cent Stronger at 1.0563.
- We expect a range today of 1.0530 – 1.0630
New Zealand Dollar
The New Zealand dollar rose to a three month high against its US Counterpart on Friday after US Payrolls posted a solid reading. Boosting demand for the riskier-backed asset US employer added an impressive 163 000 in July well above the expected reading of 100 000. With signs of life out of the world’s largest economy the Kiwi enjoyed a consistent rise for much of Friday’s session trading as high as 0.8197 against the Greenback, close to a full one US Cent above its opening levels. Meanwhile this morning the New Zealand dollar has managed to consolidate the majority of its gains as it currently buys 81.85 US Cents.
- We expect a range today of 0.8140 – 0.8240
Great British Pound:
UK Stocks rallied as did the Great British Pound on Friday as a strong Jobs number out of the US finally provided markets with some hope that the world’s largest economy can produce some positive growth. Heading in an upward direction the Sterling traded between a 24 hour range of (1.5504 – 1.5656) against is US Counterpart as it opens noticeably stronger this morning at 1.5617. Given a week in which the BOE added no additional stimulus it’s yet to be seen if the Sterling will able to hold interim support around 1.5770. Meanwhile on the cross-rates the Sterling could not keep pace with either the Aussie (1.4795) or the Kiwi (1.9086) which both open lower
- We expect a range today of 1.4750 – 1.4840
Following a week in which the US Federal Reserve and the European Central Bank both met to discuss stimulus measures, markets changed their tune on Friday following a review of the ECB’s meeting minutes in which investors were seemingly reassured that the ECB’s bond-purchases will proceed as planned. Taking the 17 Nation Euro to an overnight high of 1.2391 against its US Counterpart, both short and longer-term direction is again likely to be dictated by underlying Spanish and Italian bond yields with Germany still remaining opposed to a full-scale bond buying program. Meanwhile in the US on Friday, despite the underlying unemployment rate which rose to 8.3 percent investors were encouraged by the figure which showed the world’s largest economy added 163 000 new jobs last month. Helping the cause of the Greenback which has been heavily weighed down by speculation of QE3, the world’s Reserve currency opens stronger against the Japanese Yen at a rate of 78.559.
- AUD: Bank Holiday
- NZD: No Data Today
- JPY: Leading Indicators
- GBP: Halifax HPI m/m
- EUR: Sentix Investor Confidence
- USD: No data today