Australian dollar falls below 90 US Cents

Australian Dollar:

The Australian dollar continued its tumble intraday yesterday breaking below the 90 US Cents mark for the first time in six months on Monday afternoon. Reaching a low of 0.8982 when valued against its US Counterpart, yesterday’s sell off came fresh of the back of the Aussies worst week since November last year. With the majority of losses simply a reaction to the weekend’s disappointing economic indicators from China the positive in the short-term is that we have seen a bounce back up above the psychological support level of 0.9000 overnight. Opening marginally weaker this morning at a rate of 0.9026 all eyes will on the Reserve Bank Board’s minutes from their most recent meeting with investors keen to gain further insights into the economic conditions which influenced their monetary policy decision.

• We expect a range today of 0.8990 – 0.9060

New Zealand Dollar:

Having enjoyed a relatively quiet intraday session on Monday the New Zealand dollar received a boost overnight after a report showed a surprise decline in US Industrial production. With the soft data print from the world’s largest economy dampening demand for the Greenback the Kiwi reached an overnight high of 0.8179 when valued against its US Counterpart strengthening by more than half a cent from its earlier low of 0.8122. Opening stronger this morning at 0.8173 the domestic outlook today appears relatively flat ahead of a flurry of additional macro development from the United States this evening.

• We expect a range today of 0.8140 – 0.8210

Great British Pound:

There hasn’t been a great deal on offer for investors over the past 24 hours with the Great British Pound trading between a low of 1.6219 and a high of 1.6272 on Monday when valued against its US Counterpart. Given all the polling and speculation which has attempted to predict the outcome from this Thursday’s Scottish Referendum, the vote at the very least has proved disruptive. In what’s set to be a choppy 48 hour period the Sterling’s value also promises to be greatly influenced by this evening’s inflation read. Weaker across the board this morning the Sterling is lower against the Greenback (1.6235), the Aussie (1.7980) and the Kiwi (1.9855).   

• We expect a range today of 1.7950 – 1.8010

Majors:

The US dollar fell from a 14-month high overnight when valued against a basket of major currencies after figures showed industrial production unexpectedly fell in August. With Output declining for the first time in seven months the median forecast had predicted a rise of 0.4 percent not a decline of 0.1. In what’s likely to be bumpy a week for broader currency markets heightened price activity is expected either side of the Federal Open Market Committees two day meeting which commences tomorrow evening.  Given markets will be closely listening for any revamped language surrounding the path to higher rates, already there has been signs of heightened tension as investors fear an early exit from the stimulus game. With the market treading water for the time being there remains a raft of broader economic indicators due for release this evening which promises to provide further volatility. Opening stronger against the Yen at 107.161 the Greenback is weaker against the Euro at 1.2937.

Data releases

• AUD: Monetary Policy Minutes
• NZD: No data today
• JPY: BOJ Gov Kuroda Speaks
• GBP: CPI y/y, PPI Input m/m, RPI y/y
• EUR: German ZEW Economic Sentiment, Zew Economic Sentiment
• USD: PPI m/m, TIC Long-Term Purchases