ECB launches full scale rescue plan

Australian Dollar:

A sharp move back into US dollar dominated holdings overnight has seen the Australian dollar once again remain under pressure. A shift prompted by the actions of European policy makers overnight who announced they would pump hundreds of billions in new money into their struggling economies in an attempt to ramp up their fight against deflation. Slumping to an overnight low of 0.8053 the Australian dollar appears under notable strain with the significant and important barrier of 0.8000 now only a stone’s throw away. Opening this morning buying 80.54 US Cents investors will be keeping a close eye on the HSBC Flash Manufacturing PMI reading expected due to be released in China early this afternoon.

• We expect a range today of 0.8000 – 0.8100

New Zealand Dollar:

In what’s been a woeful week for the New Zealand dollar the tide has once again remained out overnight with investors once again dumping the higher yielding asset following the ECB’s announcement that it will inject 1 trillion euro’s into the stagnant Eurozone economy through to September 2016. Dropping to a low of 0.7495 when valued against its US Counterpart, stories of diverging monetary settings have been the key driver behind this week’s sell-off after local inflation also showed signs of softness. Weaker upon open this morning at 0.7509 macro developments from China remain the focal today as investors look to end the week on a more positive note.

• We expect a range today of 0.7470 – 0.7540

Great British Pound:

Despite the Great British Pound which climbed to its strongest level in almost seven years versus the Euro the Sterling has fallen significantly when valued against the Greenback slumping to a low of 1.5010 following the ECB’s decision to expand significantly its balance sheet. During a session which has broadly seen the Sterling sold against most of its major counterparts further weakness was attributed to comments made by BOE Policy maker David Miles who stated Britain’s inflation rate may move further away from the BOE’s 2 percent target ban in the coming months. In other currency moves the Sterling opens weaker also against the Aussie (1.8632) and the Kiwi (1.9984).

• We expect a range today of 1.8600 – 1.8690

Majors:

Comfortably surpassing the high expectations which had been established, the size, style and duration of last night’s announcement by the ECB has resulted in more than a two and half cent drop for the 18-nation Euro. A move big enough that lows of 1.1361 were witnessed, levels not seen in over 11 years, the specific details of lasts night Policy shift entail a plan to buy 60 billion euros a month worth of public and private debt through to September 2016. In a move similar to the quantitative easing programs previously unveiled by the BOJ and US Fed the heightened levels of liquidity and the accompanying low yields threaten to keep the value of the euro well and truly supressed for an extended period. Opening weaker this morning at a rate of 1.1378 the greenback is stronger against the Japanese Yen at 118.458  

Data releases

• AUD: No data today
• NZD: No data today
• JPY: No data today
• GBP: Retail Sales m/m
• EUR: French Flash Manufacturing PMI, French Flash Services PMI, German Flash Manufacturing PMI, French Services PM, Flash Manufacturing PMI, Flash Services PMI
• USD: No data today