Dollar Index remains at 8-month highs in a light day of trading

AUD / USD

Expected Range: 0.7530 - 0.7680

The Australian dollar struggled to mount any significant directional momentum through trade on Monday bouncing off supports at 0.7590/0.7600 and shrugging aside wider USD gains. While the Greenback neared nine month highs against a basket of major currency counterparts the AUD held off deeper downward corrections on expectations Philip Lowe and the RBA will look to maintain the current policy platform through both its November and December meetings. With little of note on docket today attentions remain squarely focused on Wednesday’s 3rd quarter CPI inflation report. A print outside an annualised expansion of 1.1% could shift the near term AUD outlook and force a break below 0.76 and test of supports approaching 0.7530.

NZD / USD

Expected Range: 0.7040 - 0.7230

With domestic markets closed in observance of the Labour Day Bank Holiday there was little directional guidance on hand throughout local trade on Monday, leaving the Kiwi at the mercy offshore stimulus. Having broken through a key resistance level of 0.7140 the Kiwi touched overnight highs at 0.7176. The gains however were short-lived as the Greenback strengthened against commodity currencies and the Kiwi retreated, bracing itself marginally above support at 0.7120. The Kiwi is currently changing hands against the Greenback 0.7137 as attentions turn to third-quarter US GDP data Thursday.

GBP / AUD

Expected Range: 1.5950 - 1.6110

The Pound remained above the 1.22 handle against the Greenback overnight with the pair trading between 1.2200 and 1.2240. Negotiations between the UK and the European Union as well as negotiations between England, Scotland, Northern Ireland and Wales around the timing and what is required in exiting the EU after Junes Brexit vote still are weighing on any upside that the Pound has versus the US Dollar. Today’s speech by Bank of England Mark Carney will also shed some light on a possible EU exit and what impact it would have for future growth. Against the Australian Dollar, the Pound is changing hands at 1.6040 and 1.7120 against the New Zealand Dollar.

USD, EUR, JPY

The Dollar remained at eight-month highs against the Euro during Monday’s day of trading as expectations for a U.S interest rate hike before the year end boosted demand for the Greenback. Adding to this are growing expectations of Hilary Clinton winning the upcoming U.S presidential election which aids support to a December rate hike by the Federal Reserve. The pair moved within a tight range of 1.0857 to 1.0900. Economic data releases for both German and French Manufacturing PMI exceeded expectations however, the Euro remained under pressure since the ECB president Draghi indicated last week the ECB may extend its stimulus program in December. Japan’s Trade Balance moved back into positive territory recording a surplus of 498.3 billion yen, this move was helped by an improvement in exports although it was still the 12th consecutive month that an annual decline has been reported which has come off the back of a rising USD/JPY. Markets will turn their attention to this evening speech by ECB President Draghi who is due to speak about Economic and Monetary affairs.