Dollar at its highest point this year

Australian Dollar:

The Australian dollar maintained its upward ascendency yesterday hitting fresh 2014 highs when valued against its US Counterpart after Reserve Bank Governor Glenn Stevens passed up the opportunity to talk down the local currency.  It what was a relatively upbeat economic assessment delivered by Mr Stevens in Hong Kong, afternoon traders were encouraged by the lack of “jawboning” which occurred, with Policy makers now having clearly distanced themselves from previous views, instead focusing on the basic fundamentals. Reaching an overnight high of 0.9244 the Australian dollar has now broken through some substantial topside barriers with previous resistance at 0.9150 now providing support. Stronger this morning the Australian dollar currently buys 92.24 US Cents

• We expect a range today of 0.9180 – 0.9260

New Zealand Dollar

Despite falling commodity and equity prices overnight the New Zealand dollar has not only consolidated but advanced over the course of the past 24 hours. Shrugging off the ongoing concerns still surrounding Russia, highs of 0.8619 were witnessed for the Kiwi when valued against the dollar.  In a move which confirms the New Zealand dollar as the best-performing major currency this year in the face of strong growth and higher interest rates, Finance minister Bill English was keen to point out in an interview in Hong Kong yesterday that a high dollar poses strong challenges, particularly to the nation’s exporters. Stronger by 0.3 percent this morning the New Zealand dollar currently swaps hands at a rate of 0.8591.

• We expect a range today of 0.8560 – 0.8630

Great British Pound:

The Great British Pound has been in strong demand overnight after the UK government sold a 4.2 billion pound stake in Lloyds Baking Group Plc. Taking their overall holding down to less than 25 percent the sale has been viewed as a positive by markets considering the money attained through its sale will allow the government to reduce national debt levels. Constrained by one of the largest deficits since World War II the proceeds may also assist in the government’s ability to offer tax breaks. Rallying to overnight high of 1.6595 the Great British Pound is stronger this morning at rate of 1.6582. Of key importance this evening will be the expected release of February’s retail sales number followed by GDP growth numbers on Friday night.

• We expect a range today of 1.7930 – 1.8010

Majors:

In a slightly delayed response the 17-nation Euro has fallen overnight with investors seemingly wary of the European Central Banks recent efforts to talk down the currency. With one the ECB’s most hawkish members recently hinting of a dramatically softer monetary policy stance there remains little doubt that a higher exchange rate is only making their deflationary fighting efforts more difficult. Slumping to an overnight low of 1.3775 the Euro has now lost close to a full cent this week when valued against its US Counterpart. In other currency moves the US dollar has remained steady when measured against a handful of major currencies generally supported overnight by the release of figures which showed orders for manufacturing goods rebounded during the month of February. Through to weeks end, direction for the major units will be reliant on broader risk flows with a focus also still remaining on the global growth story ahead of key GDP readings from the UK and the US.

Data releases

• AUD: No data today
• NZD: Trade Balance
• JPY: No data today 
• GBP: Retail Sales m/m
• EUR: Private Loans y/y, M3 Money Supply y/y
• USD: Unemployment Claims, FOMC Member Pianalto Speaks, Final GDP q/q, Pending Home Sales m/m