Aussie range bound in quiet macroeconomic environment

Australian Dollar:

The Australian dollar offered little for investors throughout trade on Monday failing to break outside recent ranges. The Aussie ticked higher touching 0.9323 before selling pressure sent the currency back below the 0.93 handle. With little macroeconomic stimuli lining the economic calendar direction will continue to come from Central Bank rhetoric and monetary policy speculation. Aussie opens this morning buying 0.9295 US cents.

• We expect a range today between 0.9220 – 0.9330

New Zealand Dollar:

Having initially started the day trading close to the 84 US Cent handle yesterday the New Zealand dollar took an abrupt turn lower early slumping to a mid-morning low of 0.8334. With no clear catalyst on hand to help explain the move investors have speculated that the sudden shift lower may have been caused by rumours surrounding direct currency intervention by the Reserve Bank of New Zealand. The Central Bank has yet to confirm the action but is seems the damage was in the rumour. Having reached its lowest level in six months the New Zealand dollar came under further pressure as markets squared positions ahead of today’s Terms of Trade. The Kiwi struggled to recover during offshore trade and opens this morning close to half a cent lower at a rate of 0.8341

• We expect a range today of 0.8310 – 0.8410

Great British Pound:

Sterling maintained a tight band through trading Monday as UK investors enjoyed the long weekend and subsequently ensured liquidity levels remained low. Stimuli came from offshore triggers and a slight dip in US services PMI and New Home Sales were enough to force sterling higher as investors reassessed the recent GBP sell off and looked to square positions. The rally stalled on approaches to 1.66 and we open this morning buying 1.6577 U.S cents. Attentions now turn to the US economic docket again with Core Durable Goods Orders the headline ticket driving direction in what is shaping as a quiet week from a macroeconomic standpoint.   

• We expect a range today between 1.7770 – 1.7920 

Majors:

Following a busy end to last week foreign exchange markets have remained relatively calm over the past 24 hours with Central Bank rhetoric in broader terms still helping support a stronger US dollar after Janet Yellen on Friday said rate rises could occur sooner than expected should the economic progress surpass estimates. Having reached an 11-month high when measured against a basket of currencies yesterday figures which showed the sale of new homes missed forecast by 2.4 percent in July has confirmed that the housing sector has not yet recovered as strongly as first thought given the backdrop of poor credit growth. Weaker against the Yen at a rate of 104.036 the Greenback is steady against the Euro upon open this morning at a rate of 1.3192. On the horizon today US Consumer Confidence and Core Durable Goods Orders remain the highlight.  

Data releases

• AUD: No Data
• NZD: Terms of Trade
• JPY: SPPI
• GBP: Mortgage Approvals
• EUR: No Data
• USD: Core Durable Goods Orders m/m S&P /CS composite 20 HPI, CB Consumer Confidence and Richmond Manufacturing Index