AUD continues its slide

Australian Dollar:

In what has become a familiar headline over the past month the Australian dollar hit a fresh four year low against the US dollar overnight on Friday trading as a low as 0.8121 when valued against its US Counterpart. With previous support at the 82 US Cents mark now the nearest point of resistance the major catalyst for the move lower last week came after the US Federal Reserve communicated that it would remain patient on the timing of future interest rate increases with market participants now pricing in the likelihood of an April rate rise. Opening weaker this morning at a rate of 0.8140 ranges are expected to solidify over the coming days with the festive season having a negative bearing on overall broader liquidity flows.  

• We expect a range today of 0.8100 – 0.8200

New Zealand Dollar:

With very little on offer domestically late last week investors continued their repatriation of funds back into US dollar dominated assets a move which saw the Standard and Poor’s 500 Index notch its second best week this year. In what’s shaping as a positive end to the year for the world’s deepest and safest market, commodity and growth linked currencies like the Kiwi have struggled in comparison particularly given the improved US interest rate outlook. Weaker upon open this morning swapping hands at a rate of 0.7751 trade balance figures tomorrow remain the highlight in what should be an otherwise uneventful Christmas week.  

• We expect a range today of 0.7730 - 0.7820

Great British Pound:

Triggering investors to drop the Great British Pound on Friday BOE policy maker David Miles wrote that there remains no great urgency in starting the process of moving monetary policy back towards normal settings, a stance somewhat justified given inflation slowed to be below 1 percent last month. Shedding 0.3 percent on Friday and 0.6 percent for the week a stronger US dollar hasn’t improved the situation. Opening weaker against the US Dollar this morning at a rate of 1.5620 the Sterling is stronger against both the Aussie (1.9174) and the Kiwi (2.0174).

• We expect a range today of 1.9130 – 1.9200

Majors:

The USD/JPY gained 0.6 percent last week trading in a range of 118.82- 119.63. With US Stocks broadly highly the US Dollar Spot Index gained 0.9 percent during a week dominated by key rhetoric from the US Federal Reserve who re-iterated that the US economy is still growing at a reasonably robust pace, a view which has led to accelerated interest rate forecasts. With major equity markets finishing the year on a positive note we expect this holiday shortened week to be significantly less volatile with key highlights coming in the form of Q3 US Gross Domestic Product, US durable goods orders and two home sale releases. Keeping in mind there remains notable swings occurring across emerging markets the Greenbacks near-term direction will be greatly influenced by broader market sentiment. Meanwhile this morning the Euro opens weaker when valued against its US Counterpart at a rate of 1.2228 whilst the US dollar is stronger against the Yen at 119.455.

Data releases

• AUD: No data today
• NZD: No data today
• JPY: Bank Holiday
• GBP: No data today
• EUR: Consumer Confidence
• USD: No data today