Aussie range bound ahead of busy international economic calendar

Australian Dollar:

A mixed session Monday saw the AUD drift upward throughout the Australasian session reaching intraday highs of 0.9315. With little domestic data available the Aussie took advantage of stronger demand for emerging market currencies and higher yielding assets as investors reacted to easing Ukrainian tensions. Better than expected US pending home sales then drove the Australian dollar lower as the USD retraced the day’s early losses and forced the AUD back below 0.93. Opening this morning at 0.9257 investor focus will turn to a docket laden with US data this week with Consumer confidence numbers headlining Tuesday’s calendar.

• We expect a range today between 0.9230 - 0.9320

New Zealand Dollar:

The NZD opens slightly lower this morning having traded within a tight range throughout the domestic session before moving lower throughout European and North American trade. Improved US pending home sales drove the USD higher while investors were reluctant to advance the Kiwi ahead of today’s trade balance numbers and Wednesday’s business confidence reading. The New Zealand dollar opens this morning at 0.8537 and analysts will be searching for strong figures to drive the NZD higher and recapture levels above 0.86.  

• We expect a range today between 0.8490 – 0.8610 

Great British Pound:

The GBP opens marginally stronger this morning having touched an intraday peak above 1.6850. Moving to near two week highs on expectations that today’s GDP numbers will show first quarter growth expanded at its quickest pace since 2010 the Sterling was driven upward in early trade. The currency was then buoyed further on the back of rumours US pharmaceutical giant Pfizer is looking to buy the UK’s 2nd largest drug maker AstraZeneca Plc, should the sale move forward the one off demand for GBP will, if only momentarily, force the GBP upward. Stronger than expected US pending home sales helped bolster the Greenback and the Pound then retraced the morning’s gains moving lower to hold and open today at 1.6808. With many investors still long Pound it will take a big move to push the currency higher and analyst will look to today’s first quarter GDP numbers and Thursday’s Manufacturing PMI for further direction.    

• We expect a range today between 1.8080 – 1.8220

Majors:

The Euro advanced against both its US and Japanese counterparts throughout trade on Monday as increasing tension between Russia and the Ukraine drove safe haven asset flows. While the Euro is not commonly considered a safe haven asset fears that US imposed sanctions will make the USD harder to liquefy have led to a capital flight and increased demand for the Bloc unit’s currency. The Euro advance was supported by comments from ECB President Mario Draghi. While addressing German congress Draghi suggested that quantitative easing wasn’t imminent and the Euro’s high value is, in itself, a powerful deflationary tool. The Euro opens higher this morning at 1.3850. The Greenback remains relatively unchanged advancing marginally against the Yen as stronger than expected Pending Home Sales surprised investors. It seems however the market is reluctant to over inflate the USD leading into Wednesday’s first quarter GDP numbers and this week’s Federal Reserve meeting.  Analyst will keep a close eye on the Central Banks rhetoric for any signs indicating possible changes in monetary policy as interest rate expectations continue to be the primary driver of USD direction.  

Data releases

• AUD: No Data  
• NZD: Trade Balance
• JPY: No Data – Bank Holiday
• GBP: Prelim GDP, 10 Year Bond Auction and Index of Services 
• EUR: German Prelim CPI, German Consumer Climate, Spanish Unemployment, M3 Money Supply, Private Loans y/y, Italian Retail Sales and Italian 10 year Bond Auction.
• USD: S&P/CS composite 20 – HPI and CB Consumer Confidence