Markets flat as the Trump trade loses its shine

AUD / USD

Expected Range: 0.7580 – 0.7710

The Australian dollar is virtually unchanged when valued against the US counterpart. In early Asian trade on Monday the Aussie is holding comfortably above 76 cents, unable to benefit from any US dollar weakness. The AUD/USD pair reached an overnight high of 0.7641. On the data front, today, quiet again locally, the Aussie will look offshore at the US tax reforms which will remain the dominant theme. Apart from Thursdays HIA New Home Sales for the month of March the Aussie will likely keep trading according to sentiment for the most part of this week. The AUD/USD pair is currently trading at 0.7630. We now expect support to hold on moves approaching 0.7600 while any upward push will likely meet resistance around 0.7650.

NZD / USD

Expected Range: 0.7000 - 0.7080

Keeping its head above water for much of Friday’s session the New Zealand dollar finished last week at a similar level to where it was left, trading up above the 70 US Cents mark when valued against its US Counterpart. Exposing its soft underbelly the New Zealand dollar has struggled to advance in the near-term that is despite being paired against a Greenback which has shed 1.5 percent. Whilst falling dairy prices and shrinking interest rate differentials have lowered its appeal, RBNZ Governor Graeme Wheeler re-affirmed last week that there remains a need for a lower Kiwi to further a more balanced growth story. Opening steady versus the Greenback the New Zealand dollar currently swaps hands at a rate of 0.7028.

GBP / AUD

Expected Range: 1.6300 - 1.6450

The Great British Pound is weaker today when valued against its US counterpart falling overnight to 1.2489. The GBP/USD pair reached a 24-hour high of 1.2494 unable to advance through the 1.2500 level. On the data front, in a light week for economic data, attentions will turn to the formal triggering of Brexit on Wednesday which will headline the UK calendar this week. Followed by Friday’s release of Quarterly Gross Domestic Product which is  expected to rise 0.7% quarter/quarter which suggests that the UK economy is on the up-and-up. 

USD, EUR, JPY

In assessing the fall-out from Donald Trump’s failed health-care vote on Friday, broader questions have continued to be raised in regards to the new administrations ability to now push through its pro-growth agenda. Whilst US equity markets bounced from a session low the S&P 500 endured its worst week since the election last November as political wrestling infiltrated and dominated new flows. Emphasising the importance which is now being placed on the implementation of Trump’s top level campaign pledges, the euphoria which surrounds the world’s largest economy threatens to be de-railed further should policy makers failure in their efforts to have other priorities such as key tax reforms passed. Down 1.6 percent for the month, the US Dollar edged lower when valued against a handful of its major peers, its slide most evident versus the Japanese Yen which opens notably stronger this morning at 111.312. Overcoming a relatively uneventful start the economic calendar is expected to heat up mid-week ahead of the release of consumer confidence and growth data from the United States.