Yen Rallies in Safe Haven Push

AUD / USD

Expected Range: 0.7600 – 0.7700

The Australian dollar hit a three week high last week, despite being hampered by strong resistance levels at 0.7720. Opening below the 0.77 handle on Friday, there was little movement in intraday trading before pulling lower as the United States CM Leading Index figures impressed and continue to show strength in the US economy. The Greenback strengthened against the Aussie seeing an eventual low in the American trading session closing at 0.7760. Locally we look to RBA Monetary Policy Minutes on Tuesday along with FOMC minutes in focus Thursday. With Presidents Holiday cutting the trading week short, we expect it to be a quiet day with the Australian dollar opening at 0.7675.

 

NZD / USD

Expected Range: 0.7140 - 0.7240

The New Zealand Dollar closed the week lower when valued against its US counterpart as investors responded to the Federal Open Market Committee meeting and an upbeat retail sales and inflation prints. Local data on Friday saw Business NZ Manufacturing Index was down on the previous month from 54.2 to 51.6, and Core Retail Sales volumes rose 0.8 percent for the Q4 2016. This week attentions turn today’s release of Producer Price Index (PPI) for the fourth quarter in what is otherwise a relatively quiet day for economics. The NZD/USD pair is currently trading at 0.7180. We now expect support to hold on moves approaching 0.7139 while any upward push will likely meet resistance around 0.7249.

 

GBP / AUD

Expected Range: 1.6150 - 1.6250

It was a disappointing day for the British Pound as retail sales figures in the UK came in well under expectations -0.3% for the month. Attempting to keep its head above 1.2500 against its American counterpart last week, the Sterling saw immediate selling pressure and continues to trend lower to test support at 1.2400 on Fridays close. Investors look forward to a raft of British data this week as the Right move HPI kicks off proceedings along with Industrial orders. Both the Australian Dollar (1.6147) and New Zealand Dollar (1.7230) opening notably higher against the Sterling this morning.

 

USD, EUR, JPY

The U.S Dollar moved higher against a majority of counterparts throughout trade on Friday as investors responded to an upbeat Federal Reserve and stronger than anticipated retail sales and inflation prints.  Fed Chair Janet Yellen remained relatively hawkish when addressing a senate committee on Monetary Policy suggesting the FOMC would be prepared to raise rates three times throughout 2017 if the economy remains on track. Her comments were backed by both Boston and Philadelphia FOMC representatives and while offering some guidance did little to assuage the confusion stalking dollar bulls. The Greenback advanced against the Euro while the Yen rallied across the board. Uncertainty surrounding upcoming elections in France and the Netherlands and ambiguity encircling U.S fiscal and domestic growth policy has pushed investors toward safe haven plays bolstering demand for the Yen and Swiss Franc. The Yen advanced 0.3% against the world’s base unit and moved back through 113.00 to touch intraday lows at 112.75. Attentions now turn Wednesday’s FOMC meeting minutes with whipsaw action expected through early trade as investors responded to continued political developments across Europe and U.S markets enjoy an extended weekend in observance of Presidents Day.