Markets tread water ahead of FOMC

Australian Dollar:

The Australian dollar has traded in an extremely tight range over the past 24 hours when valued against its US Counterpart with a low of 0.8787 countered by a high of 0.8823.  Given a domestic economic calendar which provided zero direction for the domestic unit overall broader investor sentiment has remained cautious during the early parts of this week with the only real positive note coming from Europe after the ECB tested the stability of some of the region’s largest banks. Opening stronger this morning at a rate of 0.8803 direction this week appears most likely to come from the United States with the Federal Reserve meeting on Thursday poised to provide plenty of volatility.  

• We expect a range today of 0.8770 – 0.8830

New Zealand Dollar:

Following a slow start due mainly to the extended Labour Day long weekend the New Zealand dollar has managed to advance during overnight trade when valued against its US Counterpart assisted by a notably weaker Greenback. With Pending Home Sales and a Preliminary Services PMI Index both missing forecast the Kiwi reached an overnight high of 0.7901 a full cent above its opening level of 0.7849. Upon open this morning liquidity levels have started to normalise ahead of what’s shaping up as a relatively quiet day of trade. Currently buying 78.92 US Cents Central Bank activity both domestically and in the US will be at the forefront of any heightened price activity through to weeks end.

• We expect a range today of 0.7860 – 0.7920

Great British Pound:

In a report released overnight figures showed Retail Sales volume continued to grow at a steady pace during October with another strong rise expected during the month ahead. With CBI Realized Sales advancing at a quicker than expected pace, Greenback weakness has also assisted the Great British Pound overnight with the Sterling reaching an eventual high of 1.6146 when up against the world’s reserve currency. Half a cent stronger against the Greenback this morning at 1.6124 the Sterling is also stronger against the Australian dollar (1.8314) whilst weaker against the New Zealand dollar (2.0427).

• We expect a range today of 1.8280 – 1.8350

Majors:

It remains very much a case of what lies ahead for currency markets this morning with the overnight session providing very little price activity for the major pairs. Whilst US macro developments in the form of Pending Home Sales and Preliminary Services PMI provided some cause for a sell-off, overall demand for currencies like the Euro has increased given underlying Greenback softness. In what threatens to redefine trends investors still await monetary policy updates from the Eurozone as well as labour, inflation and lending data later in the week, information which could place further emphasis on the activities of Central Banks. Upon open this morning the Euro is stronger against the Greenback at 1.2705 whilst the Japanese Yen has also advanced with the USD/JPY cross lower at 107.767.

Data releases

• AUD: No data today
• NZD: No data today
• JPY: Retail Sales y/y
• GBP: MPC Member Shafik Speaks, MPC Member Cunliffe Speaks
• EUR: No data today
• USD: CB Consumer Confidence, Core Durable Goods Orders m/m