Quiet end to the week as political events take the spotlight

Australian Dollar:

As expected with no local data to provide the Australian dollar direction on Friday the AUD remained unchanged against most majors during Asian trade. During the US session a disappointing Consumer Sentiment reading helped the AUD move as the US was sold off heavily across the board. The Aussie ended the week close to half a cent stronger versus the US dollar at 0.9392 however is relatively at the same levels as Monday’s open. Focusing on the week ahead investors will turn to the CPI figures being released this Wednesday. Onlookers will be watching closely as the RBA has recently placed key emphasis on inflation remaining between the 2 and 3 per cent band.

• We expect a range today of 0.9345 – 0.9440

New Zealand Dollar:

In a similar move to its cross Tasman counterpart the NZ dollar had a quiet end to the week on Friday with subdued trade supported by a lack of domestic data. Overnight in US trade the Kiwi managed to gain back some of the week’s losses against the Greenback as a disappointing consumer confidence reading was printed in the US. The high yielding currency ends the week 1.5 per cent lower against the US at 0.8690. The NZ dollars struggles all week are as a result of risk appetite disappearing from the market underpinned by climbing tensions in the Middle East and the tragic Malaysian passenger jet crash. This week investors will focus on the NZ cash rate being announced on Thursday and the recent decline in dairy prices along with slowing inflation has left investors in two minds over whether the RBNZ will continue to lift the cash rate in line with previous expectations.

• We expect a range today of 0.8655 – 0.8745

Great British Pound:

The British Pound fell against the Greenback at the back end of the week finishing up at 1.7083 marginally lower than the daily open and half a cent down from the weeks open. The Sterling’s falls were cushioned by a worse than anticipated US consumer confidence reading overnight on Friday as no domestic data was printed to give the Sterling direction. The GBP did however gain against the higher yielding currencies opening this morning at 1.8181 and 1.9641 against the AUD and NZD respectively as riskier assets were sold off due to tensions in the Middle East and the tragic crash of the Malaysian passenger jet. This week investors will be watching closely for more insight on UK data which could give an indication of how close the Bank of England is to a rate increase.

• We expect a range today of 1.8140 – 1.8225

Majors:

The Euro closed slightly down against the US dollar at 1.3523 on Friday as concerns over the banking crisis in Portugal continued to linger. The only major data print on Friday was the US consumer sentiment which was seen to slip as the US economic outlook was viewed in a dimmer light. This week is relatively light in regards to economic numbers being released and market sentiment may very well be determined by political events around the globe. So far the devastating crash of the Malaysian passenger jet and the rising tensions in the Middle East had seen riskier assets sold off across the board. The unfolding of these confrontations could well determine the market movements for the coming week depending on how the decisions to handle the events are received globally. 

Data releases:

• AUD: No Data
• NZD: Visitor Arrivals m/m, Credit Card Spending
• JPY: Bank Holiday
• GBP: Rightmove HPI m/m
• EUR: German PPI m/m, German Buba Monthly Report
• USD: No Data