AUD slides as relief rally falls short

Australian Dollar:

Having traded as high as 0.7249 when valued against its US Counterpart overnight on Tuesday, the initial euphoria which surrounded the POBC’s decision to loosen monetary settings has now well and truly subsided. Replaced by broader concerns that China’s economic blueprint could still reek further havoc and trigger heightened levels of instability elsewhere, Tuesday night’s classic relief rally has well and truly come to a short-lived conclusion. Whilst recovering from an overnight low of 0.7069 the Australian dollar opens lower this morning as it currently buys 71.15 US Cents.  

• We expect a range today of 0.7050 – 0.7180

New Zealand Dollar:

With the Shanghai Composite Index closing 1.3 percent lower, US Stocks have been aggressively bought overnight, a move triggered by comments from New York Fed President William Dudley that the case for monetary normalisation in September has become less compelling based on international developments. Triggering the flow of funds back into US dollar dominated assets, the New Zealand dollar has subsequently fallen by around 0.3 percent over the past 24 hours opening lower this morning at a rate of 0.6470.

• We expect a range today of 0.6400 – 0.6530

Great British Pound:

The Great British Pound hit a fresh two week low of 1.5452 when valued against its US Counterpart overnight. During a period defined by heightened price activity, key support levels on the downside have been broken over the past 24 hours amid concerns the BOE will have to hold off raising rates in the absence of any underlying inflation. In the context also of a stronger Greenback the Sterling opens comfortably below the 1.5500 mark this morning as it currently swaps hands at a rate of 1.5461. Meanwhile in other moves the Sterling is weaker also when valued against the Australian dollar (2.1709) and the New Zealand dollar (2.4007)

• We expect a range today of 2.1600 – 2.1820

Majors:

US Stocks recorded there biggest one day gain in four years on Wednesday as investors speculated that the US Federal Reserve will not raise interest rates next month, given signs of weaker offshore demand amid turbulence in China. Whilst New York Fed President William Dudley stated yesterday the prospects of a September rate hike have diminished over the past week, there has been some positive economic flows out of the world’s largest economy overnight. Comfortably beating forecast, durable goods orders rose 2 percent during July, as investors now sit tight ahead of this evening’s preliminary GDP result.  During a session which has generally favoured the US Dollar, the Greenback has notched up some impressive gains when valued against the Euro (1.1516) and the Yen (120.125) as broader measures of risk still remain far from settled.

Data releases

• AUD: Private Capital Expenditure q/q
• NZD: No data today   
• JPY: No data today     
• GBP: No data today   
• EUR: No data today
• USD: Prelim GDP q/q, Unemployment Claims, Jackson Hole Symposium