Supreme Court loss for U.K. Prime Minister Theresa
|AUD / USD
Expected Range: 0.7475 - 0.7685
The Australian Dollar tested 76c intraday and again overnight against the US Dollar as a lift in risk appetite benefited the Aussie. With no local macroeconomic pieces for investors to digest, the focus turned overseas and with a mixed bag of data out of the US the Aussie managed to hold on to recent gains. US manufacturing showed an uptick however, US existing home sales had fallen more than expected for the month of December. Tier 1 macroeconomic data due for release today being Australian Q4 CPI and the Core Rate of Inflation, with expectations of the Core Rate slowing, something that may influence the RBA’s next interest rate decision next month.
NZD / USD
Expected Range: 0.7140 - 0.7260
A bullish trend continued for the New Zealand Dollar yesterday against the Greenback touching an intraday high of 0.7275 briefly, a level not witnessed since November 10th. The catalyst for the Kiwi strength has been mainly thanks to uncertainty surrounding Trumps and the administration’s policies surrounding infrastructure rebuilds and fiscal stimulus. Offshore data was mixed out of the US and therefore Kiwi is holding strong while uncertainty on US politics remains. NZD credit card spending due today ahead of tomorrow 4th quarter CPI which is expected to show that inflation has returned to the Reserve Bank's target band.
GBP / AUD
Expected Range: 1.6450 - 1.6550
The UK Supreme Court ruled that Parliament approval is needed to trigger Article 50 in order to begin the divorce proceedings with the EU. Prime Minister Theresa May will need the approval of the Houses before triggering the Art. 50 of the Lisbon treaty. Following the Supreme Court ruling the GBP/USD pair fell to an overnight low of 1.2418. The GBP/USD pair is currently trading at 1.2511. We now expect support to hold on moves approaching 1.2480 while any upward push will likely meet resistance around 1.2550. The pound Sterling extended losses across the board versus both the Australian dollar (1.6510) and the New Zealand dollar (1.7273).
USD, EUR, JPY
The U.S Dollar enjoyed mixed fortunes through trade on Tuesday. Existing Home sales for the month of December shrank further, an annual pace of 5.49 million, below the previous month 5.65M. Flash Manufacturing PMI however was slightly better than expected recording 55.1 for the month of January, up from the previous month of 54.3 in December. We also saw encouraging data out of Eurozone with both Flash Manufacturing PMI and Flash Services PMI recording better than expected macro prints, indicating a solid start to the year. Attentions turn today to Japanese Trade Balance for the month of December. The USD/JPY is currently changing hands at 113.82.
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