Trading ranges poised for an outbreak

Australian Dollar:

It’s been an uneventful start to the week for the Australian dollar which has drifted aimlessly between a low of 0.9373 and a high of 0.9402 when valued against its US Counterpart. Once again running out of steam on approaches towards the 94 US Cents mark, direction today is set to be dictated by minutes from the Reserve of Bank of Australia’s July meeting, minutes which are scheduled to be released at 11:30am this morning. With the focus very much on the interest rate outlook policy maker’s thoughts on the currency will also be closely scrutinized as the strong dollar continues to impede economic growth. Marginally stronger this morning the Aussie buys 93.91 US Cents.

• We expect a range today of 0.9360 – 0.9430

New Zealand Dollar:

Having taken out significant resistance barriers over the past month the New Zealand dollar has enjoyed a period of consolidation during the early parts of this week trading in a very tight range yesterday when valued against its US Counterpart. Bouncing from a low of 0.8793 which was countered by a high of 0.8821 there remains a real sense that investors are sitting on their hands ahead of Janet Yellens testimony which promises to provide additional interest rates clues for the world’s largest economy. Domestically today volatility levels are once again set to remain relatively low as the New Zealand dollar opens virtually unchanged this morning at a rate of 0.8802.

• We expect a range today of 0.8770 – 0.8830

Great British Pound:

UK stocks climbed the most in almost two weeks overnight bolstered by euro-zone industrial production which declined by 1.1 percent in May. Remaining unresponsive during the early parts of this week the Great British has struggled when valued against its US Counterpart falling overnight from a high of 1.7142 down to opening levels this morning of 1.7082. In a 24 hour period which promises to be anything but uneventful their remains a range of key risk events on the horizon most notably UK inflation tonight and Chinese GDP tomorrow. Weaker across the board this morning the Sterling is lower against both the New Zealand dollar (1.9400) and the Australian dollar (1.8184).  

• We expect a range today of 1.8150 - 1.8220

Majors:

In a statement which provided support for the 18-nation Euro overnight European Central Bank President Mario Draghi during his testimony in Strasbourg stated that Policy makers had strong incentives to spur and build lending, offering banks more than 700 billion euros of cheap funding in the hope it will boost credit throughout the real economy. Rallying from a low of 1.3594 to open stronger this morning at 1.3618 those gains may well be threatened this evening as Federal Reserve Chair Janet Yellen delivers her semi-annual monetary policy report before the senate and banking committee. With all eye’s on Yellen this evening, the greenback’s direction may well be altered should her language suggest a move to higher interest rates at a quicker than expected pace. In what’s been a very quiet 24 hour window there appears choppier seas ahead with the US dollar opening marginally weaker this morning at 101.536 against the Yen.

Data releases

• AUD: Monetary Policy Meeting Minutes, Monetary Policy Statement, New Motor Vehicle Sales m/m
• NZD: No data today
• JPY: BOJ Press Conference, Monetary Policy Statement
• GBP: CPI y/y, RPI y/y
• EUR: German ZEW Economic Sentiment, ZEW Economic Sentiment
• USD: Core Retail Sales m/m, Retail Sales m/m, Empire State Manufacturing Index, Fed Chair Yellen Testifies