Aussie rumbles back through 0.77

AUD / USD

Expected Range: 0.7660 – 0.7760

The Australian dollar broke through and held onto gains above 0.77 U.S cents yesterday buoyed by wider USD weakness. Having broken resistance at 0.7690 for a second consecutive week the AUD appears poised to gap higher if it can cement recent gains and push through 0.7730. The Aussie has enjoyed strong gains throughout the year thus far and looks well placed to continue upward if the yield advantage remains intact. A strengthening current account deficit buoyed by an upswing in commodities lead by Iron Ore and Coal and an RBA governor confident the economy can continue to expand there is scope for a push toward 0.80. Of course much depends on the continued uncertainty that surrounds the Trump administration and its impact on Fed policy changes as attentions today turn to Governor Lowe for greater insight into RBA policy thinking and continued political shifts across Europe. 

NZD / USD

Expected Range:0.7160 – 0.7280

The New Zealand Dollar staged a comeback following comments by the new US Treasury Secretary Steven Mnuchin who told CNBC that he wanted to see a significant tax reform passed before congress’ August recess which is no more than six months away. The aim is to focus on middle-income tax cut and simplification for business, with no further clues on this markets were disappointed  who have been expecting the Trump administration to deliver on promises of  tax reform, infrastructure spending and a cut in regulation. In other news, US Initial claims increased last week from 238k to 244k for the week ending February 18th which assisted the NZD/USD pair holding above 72c, currently changing hands at 0.7230. 

GBP / AUD

Expected Range: 1.6150 – 1.6350

The Great British Pound jumped making strong gains against the US Dollar breaking through 1.25 resistance level, it touched an eventual high of 1.2560 which was a level not seen since February 10th.  The catalyst for the move was driven by a rebound in U.K Retail Sales, the survey of 128 firms, of which 64 were retailers showed that sales volumes are expected to rise again in the year to March. The slight increase in overall retails sales volumes were assisted by clothing and non-store sectors. With Cable currently changing hands at 1.2553, investors will next focus on today’s BBA Mortgage Approval. It’s leading indicator of housing market demand for the UK and measures the number of new mortgages for home purchase were approved by the British Bankers Association, the BBA represents major banks that make up around 65% of the total UK mortgage lending. 

USD, EUR, JPY

The US Dollar moved lower across the board through trade on Thursday relinquishing hard fought gains won earlier in the week as comments from Trump administration officials weighed heavily on the worlds base currency. Having drifted sideways for much of the day the Dollar moved downward as Treasury Secretary Steven Mnuchin suggested that policy steps and Tax Reform were unlikely to impact the economy this year. The comments appeared to mute Trumps recent promises and again throw into question when and where Trump will deliver the fiscal and reformist policies proffered throughout the electoral campaign. Moving through 113 JPY the USD touched two week lows at 112.57 while the Euro met resistance on moves approaching 1.06. Any advance for the 19 Nation combined unit was muted by new polls that showed Nationalist candidate Marine Le Pen was closing the gap on Independent Emmanuel Macron. Falling against a basket of counterparts excluding the Dollar the Euro remains increasingly vulnerable to political risk and rising uncertainty.