China Growth equals good news for the Aussie

Australian Dollar:

It was all about economic growth yesterday with the Australian dollar being driven higher to an overnight peak of 0.8995 when valued against its US Counterpart after Chinese Premier Li Keqiang announced that growth would continue at rate of 7.5 percent throughout 2014. Bolstered yesterday also by local growth figures which showed Australia’s economy expanded at a pace of 0.8 percent during the final quarter of last year, the positive tone across Asian markets has for the time being justified the move higher for the Australian dollar. Stronger this morning as the Aussie buys 89.82 US Cents investors have another busy day ahead given the expected release of Retail Sales and Trade Balance figures over the coming hours.

• We expect a range today of 0.8940 – 0.9020

New Zealand Dollar:

The New Zealand dollar has bounced nicely from its earlier low of 0.8375 over the past 24 hours with broader Greenback weakness being the main trigger. After a report overnight which showed US private employers added only 139 000 jobs in February well short of the expected 160 000 forecast, expectations for a strong non-farm employment report on Friday have been wound back. Advancing to its highest level in seven weeks when valued against its US Counterpart confirmation that China plans to continue their economic expansion at a rate of 7.5 percent during this year has also bolstered investor’s demand for the Kiwi. Opening stronger this morning the New Zealand dollar buys 84.16 US Cents.   

• We expect a range today of 0.8370 – 0.8450

Great British Pound:

The Great British Pounds strong performance over the past 24 hours can be put down to more than just a weaker US dollar after figures overnight showed UK services expanded for a 14th straight month in February. In line with manufacturing and construction which both grew in February an accelerating services sector only adds to the pile of evidence which suggests Britain’s economy is growing at a steady pace. Having reached a high of 1.6741 the Sterling is half a US cent stronger this morning at 1.6718. On the outlook today all eyes will be on the Bank of England for hints surrounding the timing of future interest rates moves.

• We expect a range today of 1.8570 – 1.8640

Majors:

It’s been a turbulent night across financial markets with US stocks fluctuating amid a handful of key data prints which missed forecast. Triggering a broader move lower data indicated that the US Services Industry expanded during February at its slowest pace in four years whilst The Institute for Supply Management’s non-manufacturing Index slipped to 51.6 in February from 54 the previous month. Whilst the US Federal Reserve said in its monthly beige book survey that the economy in most regions is expanding despite the harsh weather expectations for a strong non-farm employment read on Friday have been scaled back after last night’s weak ADP employment number. Remaining relatively steady amongst the carnage the USD/JPY is stable this morning opening at rate of 102.318. In other currency moves the 17 nation Euro also opens in familiar territory at 1.3729 as investors continue to sit on their hands ahead of the ECB meeting this evening.

Data releases

• AUD: Retail Sales m/m, Trade Balance
• NZD: No data today
• JPY: 30-y Bond Auction   
• GBP: Halifax HPI m/m, Asset Purchase Facility, Official Bank Rate, MPC Rate Statement
• EUR: Minimum Bid Rate, ECB Press Conference
• USD: FOMC Member Dudley Speaks, Unemployment Claims, Revised Non-farm Productivity q/q