Strong US figures as Aussie slides

Australian Dollar:

The Australian dollar began Thursday trading in a tight range after a previous couple days of volatility. Investors were watching closely for New Motor Vehicle sales data however the figures came in flat. The AUD failed to move after the release of these numbers as they seemed to have a fairly muted affect. As Asian trade continued the Aussie drifted downwards to touch lows of 0.9361 however managed to regain all of the day’s losses touching highs of 0.9381 not too long after. This left the Aussie in a 20 point range for the Asian session which is unusual in what is generally the most volatile period for the higher yielding currency. Overnight the AUD touched lows of 0.9326 against the US dollar however the Aussie showed resilience managing to consolidate to open today at 0.9354, only slightly weaker against the Greenback. Today we see no local data out of Australia as investors will turn their eyes to the heavy data releases overnight in the US to bring in the weekend. 

• We expect a range today of 0.9305 – 0.9390

New Zealand Dollar:

The NZ dollar managed to find some strength after an as expected positive budget was published mid Thursday. The Kiwi began the day strong holding momentum from Wednesday with the Business NZ manufacturing being released early in the day. The data came in worse than expected however analysts are pointing at the long weekends which are thought to have contributed to the slip. On the back of this data the NZ dollar did fall slightly lower however investors waited off until the budget, which was due to be released around midday. As expected the budget estimated a surplus, which showed NZD372 Million for the coming year with a GDP projection of 4 per cent. Prime Minister John Key has delivered his budget with talk of potential of tax cuts on the horizon. The higher yielding currency found strength on the back of New Zealand’s strong economic position for the future and rallied to touch highs of 0.8685 against the Greenback. Overnight the NZ dollar gave up strong gains after the budget weakening on the back of impressive US figures. This morning the Kiwi opens weaker at 0.8639 against the US dollar. Today with no domestic data being released the NZ dollar will look to the substantial figures being released overnight out of the US for guidance.

• We expect a range today of 0.8595 – 0.8690

Great British Pound:

After a previous day where the British Pound weakened against most majors the GBP managed to begin Thursday on a stronger note. Underpinned by subdued trade the British Pound gained against the US dollar as the Cable reached highs of 1.6777 up over 11 points from the open. The GBP similarly begin the day climbing against the higher yielding currencies however gave up most gains against the Aussie early on. On the other side of the Tasman the strong budget out of New Zealand helped the Kiwi Dollar strengthen to increase over 35 points versus the Sterling. Overnight the British Pound continued its strong form against the US dollar as the cable reached highs of 1.6808 after the Bank of England upgraded 2015 growth forecasts and implied interest rates were in no hurry to be lifted. Today the British Pound opens stronger against the US dollar at 1.6790. The GBP similarly was stronger against the higher yielding currencies and opens today at 1.7944 and 1.9423 against the Aussie and Kiwi respectively. With no data being released in the UK overnight investors will look to the US before the weekend begins. 

• We expect a range today of 1.7895 – 1.8005

Majors:

The Euro began Thursday trading in a narrow range opening at 1.3713 touching 1 point lower than the open and a high of 1.3722. Investors seemed to be waiting for overnight data and the figures released did not disappoint creating a fair amount of volatility.

Overnight we saw an abundance of strong US data released. The Philadelphia manufacturing index showed a reading of 15.4 which was 1.5 stronger than forecast. The data was released after the department of Labour in the US showed the amount of citizens applying for jobless benefits fell to 297,000 after no change had been forecast. Core CPI and manufacturing sales both came in ahead of expectations which helped the US dollar across the board. These positive figures will be looked at closely by the US Federal reserve when they aim to gauge the country’s economic recovery and how to proceed with the tapering of their bond buying program.

Investors will watch the Building Permits and Preliminary Consumer Sentiment out of the US later tonight to guide the way as we lead into the weekend.

Data releases:

• AUD: No Data
• NZD: No Data
• JPY: Revised Industrial Production m/m
• GBP: No Data
• EUR: French Prelim Non-Farm Payrolls q/q, Italian Trade Balance, Trade Balance
• USD: Fed Chair Yellen Speaks, Building Permits, Housing Starts, Prelim UoM Consumer Sentiment, Prelim UoM Inflation Expectations