Investors assess positions ahead of Yellen address

AUD / USD

Expected Range: 0.7580 - 0.7680

The Australian dollar edged marginally lower through trade on Tuesday as investors reassess U.S interest rate expectations. The Aussie found support in early trade advancing to touch intraday highs at 0.7655. Analysts appeared to downsize their expectations for U.S interest rate plays and prepare positions ahead of US fed Chair Janet Yellen’s Jackson Hole address. The symposium of Global Central bankers will be closely monitor by market makers as traders scrutinise comments for clues and hints to future monetary policy platforms. With many investors anticipating Yellen will proffer an upbeat commentary nuanced with dovish undertones the Greenback suffered a short term repositioning through Australasian trade. The AUD then met profit takers and eased lower into the daily close as upbeat US housing data helped stop the USD sell off. Touching intraday lows at 0.7614 the AUD now buys 0.7610. Attentions today remain with U.S interest rate expectations as directional flows stem from shifting sentiments. 

NZD / USD

Expected Range: 0.7250 - 0.7350

The New Zealand enjoyed a mixed fortunes through trade on Tuesday closing marginally higher. Buoyed by wanning U.S interest rate expectations and a belief Fed Chair Janet Yellen will fail to deliver the hawkish assessment needed to reverse market sentiment the Kiwi rallied through 0.73 touching intraday highs at 0.7343. The Kiwi found additional support in comments from RBNZ assistant governor John McDermott. In an address prepared by Central Bank Head Graeme Wheeler, McDermott defended the banks current monetary policy platform verifying the bank will chase an additional 35 basis point rate cut but hit back at those claiming a more aggressive approach was needed. Profit taking forced the currency lower throughout North American trade and the NZD moved back through the 0.73 handle and buys 0.7288 at time of writing.  

GBP / AUD

Expected Range: 1.7050 - 1.7450

The Great British Pound found support through trade on Tuesday rallying through 1.3150 to touch intraday highs at 1.3210. With little domestic data on hand the GBP found support in steady manufacturing and services performance across Europe. The expansion in business performance bolstered confidence in a post Brexit market place. Having recovered strongly from moves below 1.30 the Sterling remains vulnerable to deeper downside moves as Brexit volatility and additional BoE easing weigh on upside rallies.  

USD, EUR, JPY

The Greenbacks two day advanced stalled through trade on Tuesday as investors appeared to reassess positions leading into the Jackson Hole symposium of Central Bankers. The USD bounced about against the majority of major counterparts edging back below 100 JPY and failing to force the Euro below 1.1300. Sentiment has fluctuated throughout the past 3-4 weeks as markets adjust positions and expectations surrounding US and Federal Reserve interest rate movements. Hawkish commentary from key Fed Officials throughout last week helped bolster confidence leading into Fed Chair Janet Yellen’s Symposium address on Friday. The Greenback edged higher throughout Monday but a run on hawkish expectations has forced the world’s base currency lower. Many investors anticipate Yellen, while spruiking the Fed’s desire to tighten monetary policy, will proffer a commentary nuanced with dovish undertones, reiterating the Fed’s desire to adopt a measured policy platform.  With attentions squarely focused on Fridays Symposium and commentary direction through Wednesday will again stem from IR sentiment.