AUD sold on approaches towards 94 US Cents

Australian Dollar:

Interest in the Australian dollar diminished late last week where it appeared investors were reluctant to pick up the higher yielding asset at levels anywhere close to the 94 US Cents mark. Having reached a late overnight high of 0.9377 when valued against its US Counterpart on Friday continued tensions in the Ukraine as well as signs of cooling inflation within China have done little to help improve broader risk sentiment. With figures showing consumer inflation moderated to an 18-month low of 1.8 percent from a year earlier in April the focus will remain on the world’s second largest economy leading into tomorrow’s expected release of the Industrial Production figure. Opening this morning in a slightly weaker position the Australian dollar currently buys 93.55 US Cents

• We expect a range today of 0.9320 -0.9390

New Zealand Dollar:

Having traded as high as 0.8778 when valued against its US Counterpart earlier in the week the New Zealand dollar reached its lowest point in over 5 days on Friday bottoming out at a rate of 0.8603. With a strengthening US dollar being the major theme on Friday optimism surrounding the US economy continues to blossom on the expectation it will grow by around 3 percent over the coming 12 months. Opening under pressure this morning, 0.3 percent lower the New Zealand dollar currently swaps hands at a rate of 0.8616. Looking ahead this week the highlight of the economic calendar comes in the form of RBNZ’s Financial Stability Report scheduled for release on Wednesday.  

• We expect a range today of 0.8580 – 0.8650

Great British Pound:

During a session which bolstered the optimism surrounding projected growth levels across the British economy figures on Friday showed factory output grew at its fastest pace for a calendar quarter in almost 15 years. Whilst figures showed manufacturing production rose by 0.5 percent during the month of April the positive number was not enough to spur significant interest in the Great British Pound which got out-paced by a stronger US dollar. Having traded between a low of 1.6830 and a high of 1.6937 the Sterling is weaker by comparison this morning at a rate of 1.6844. Broadly lower the Great British Pound has also lost ground against both the Aussie (1.7995) and the Kiwi (1.9545).

• We expect a range today of 1.7960 – 1.8030

Majors:

The 17-nation Euro continued to be sold in an aggressive manner late last week with the fallout from Thursday’s ECB Monetary Policy Statement still acting as a catalyst for the broader move lower.  Whilst ECB President Mario Draghi has made a pre-commitment for further easing in June, addition stimulus outside of a standalone rate cut may be required to satisfy investors who view the lack of inflation as a key risk to an already fragile economic framework. Trading down from an earlier high of 1.3843 the Euro is notably lower this morning at 1.3755 when valued against its US Counterpart. In other moves on Friday the Greenback notched up some impressive across the board gains with a generally cautious tone instilling across financial markets off the back of ongoing tensions throughout the Ukraine as well poor economic signals from China. Stronger against the Yen the Greenback currently trades at a rate of 101.861.

Data releases

• AUD: NAB Business Confidence
• NZD: No data today
• JPY: Current Account  
• GBP: No data today
• EUR: No data today
• USD: FOMC Member Plosser Speaks, Federal Budget Balance