Chinese jitters weigh on the AUD

Australian Dollar:

The AUD starts the week off much weaker amid ongoing economic growth concerns for China. The Aussie opens this morning buying 87.69 U.S cents, trending downwards during Friday’s session after an index of unfavourable economic indicators were reported for Australia’s largest trading partner. In addition, falling commodity prices and mounting expectations for the Federal Reserve to increase interest rates have added to the selloff of the local currency, which lead to seven month intraday lows of 0.8744. With an empty economic docket on the horizon the Aussie will again look abroad for any significant driver regarding price action throughout the upcoming trading session.

• We expect a range today of 0.8720 – 0.8790

New Zealand Dollar:

With the Kiwi opening this morning at 0.7863, Greenback strength over the last week has brought the NZD/USD rate down to lows not experienced since September 2013. Trade balance figures that printed above expectations for the local currency last week were not enough to counter the string of positive releases for the USD, combined with hawkish rhetoric emanating from the Federal Reserve regarding an interest rate rise in the U.S occurring perhaps much sooner than expected. With no local figures being released for the Kiwi throughout today’s trading session the NZD will turn its attention offshore to U.S data being released overnight to dictate any notable movements in the current rate.

• We expect a range today of 0.7830 – 0.7900

Great British Pound:

The Pound Sterling has seen a recent appreciation within the week just passed as Governor Carney indicated the potential for rate hikes in the near future. The increase against the majority of its major counterparts was spurred by the increasingly positive picture that was painted by the BOE Governor regarding the UK economy. With highs of 1.6333 countered by lows of 1.6233, the Cable found itself trading within a relatively tight range however against the EUR the GBP traded at a two year high due to EUR weakness. Major figures being scheduled for release that are looking to have the most significant impact on the GBP would be Manufacturing and Services PMI later in the week. The Pound opens today against the AUD and NZD at 1.8549 and 2.0546 respectively.

• We expect a range today of 1.8520 – 1.8590

Majors:

Demand for the EUR/USD has dampened throughout the last trading week, reaching lows of 1.2675 during Friday’s trading session. Opening a staggering 85 basis points lower at 1.2681 this morning, the Euro’s decline is closely linked with the ECB’s recent decision to reduce interest rates and announce the introduction of a cheap loan program to banks in order to stimulate the struggling economy. In other happenings on Friday the US Dollar maintained its upward trajectory rising off the back of a positive GDP print which showed the world’s largest economy had expanded by an impressive 4.6 percent bolstering the case for higher rates sooner. Opening close to its highest level in six versus the Yen at 109.32 Friday’s non-farm payroll number promises to once again steal the limelight.

Data releases:

• AUD: No Data
• NZD: No Data
• JPY: No Data
• GBP: Net Lending to Individuals m/m, M4 Money Supply m/m, Mortgage Approvals
• EUR: German Prelim CPI m/m, Spanish Flat CPI y/y, Italian 10-y Bond Auction
• USD: Core PCE Price Index m/m, Personal Spending m/m, Personal Income m/m, Pending Home Sale m/m