Resistance looms at the 88 US Cents mark

Australian Dollar:

Having butted its head up against the 88 US Cents mark consistently last week the Australian dollar opens this morning in a familiar position as it currently buys 87.98 US Cents. With a generally upbeat tone spurring demand for domestic equities there was a distinct lack of drivers on hand over the course of Friday evening with US economic prints in the form of New Home Sales and Flash Manufacturing the major risk events. Whilst investors experienced a week dominated by wild intraday swings, overall there remained a distinct lack of follow through with initial price signals not sufficient enough to establish any underlying trends. Looking ahead this week recent ranges threaten to be broken ahead of the FOMC rate decision and US GDP on Friday

• We expect a range today of 0.8760 – 0.8830

New Zealand Dollar:

Investors sold the New Zealand dollar from levels just above the 88 US Cents mark mid-week after top-tier economic fundamentals in the form of CPI (0.3 %, one year low) and Trade Balance Figures (Exports fell 3 percent) both comfortably missed there forecasted marks. Slumping to a low of 0.7792 when valued against its US Counterpart on Friday the broader outlook for the Kiwi remains relatively bearish ahead of the RBNZ Monetary Policy Statement this Thursday. Whilst widely expected to maintain its benchmark cash rate the accompanying statement will be cast under the microscope especially given signs of subdued price pressures. Starting the new week still lower from the same corresponding period last Monday the Kiwi is 0.2 percent higher than Friday opening this morning at rate of 0.7849.

• We expect a range today of 0.7820 – 0.7880

Great British Pound:

The Great British Pound advanced on Friday when valued against its US Counterpart after preliminary GDP matched economists forecast having grown by 0.7 percent last quarter. Reaching an overnight high of 1.6097 US dollar moves as well as broader European developments are shaping as key for the Sterling this week given its light economic docket. Opening stronger this morning against the Greenback at 1.6085 the Sterling is weaker against both the Australian dollar (1.8273) and the New Zealand dollar (2.0452).

• We expect a range today of 1.8240 – 1.8300

Majors:

In what’s been viewed in a positive light by broader market participants The European Central Bank has carried out stress tests on all of Europe’s largest lenders finding there remains capital shortfalls worth 2.9 billion euro’s. Among lenders requiring additional capital the biggest holes were found through Italy’s banking system with no large institutions in France, Germany or Spain found lacking. Opening higher against its US Counterpart this morning at a rate of 1.2668 the week ahead is shaping as a big one for the 18 nation bloc ahead of key CPI estimates as well as the FOMC statement on Thursday. In other currency happenings the US dollar has managed to muscle out a slight advance over the past week despite persistently dovish rate forecasts bolstered however by broader safe haven plays ahead of what could be a definitive play by the Federal Reserve. Lower this morning against the Yen the Greenback currently trades at a rate of 108.136

Data releases

• AUD: No data today
• NZD: Bank Holiday
• JPY: No data today
• GBP: No data today
• EUR: German Ifo Business Climate, Private loans y/y
• USD: Pending Home Sales m/m