Volumes light ahead of RBA Rhetoric

AUD / USD

Expected Range: 0.7600 – 0.7700

The Australian dollar traded in a tight 25 pip range for a conservative start to the week as the annual Presidents Day holiday produced low liquidity in the markets. Opening Monday morning at 0.7765, The Australian dollar topped out at 0.7690 and could potentially test the 0.77 handle once again this week. With domestic data light on, the spotlight turns to central banks as investors look for any change in monetary stance by the RBA in today’s policy minutes release along with the FOMC on Thursday. The Australian dollar opens this morning at 0.7685 against its US counterpart.

NZD / USD

Expected Range: 0.7140 – 0.7240

On the back of a US holiday the New Zealand dollar opens this morning little changed when valued against its US Counterpart. Local domestic economic factors continue to be positive for the Kiwi dollar with yesterday’s Producer Price Index (PPI) for the fourth quarter rose more than expected. For the three months ending in December Input prices rose 1 percent, while output prices rose 1.5 per cent which pointed to inflationary pressures. Attentions now turn to tonight's Global Dairy Trade auctions. The NZD/USD pair is currently trading at 0.7187. We now expect support to hold on moves approaching 0.7138 while any upward push will likely meet resistance around 0.7239.

GBP / AUD

Expected Range: 1.6150 – 1.6350

The Great British Pound advanced against its US Counterpart reaching an overnight high of 1.2483 during the London morning, before settling around 1.2460 in late afternoon trade. However, amid a holiday in the US market volatility remains lows. There were some minor macroeconomic releases in the UK overnight starting with the release of Rightmove House Price Index which was up 2 percent for the month of January. CBI Industrial Order survey was also better than expected up to 8 from previous 5. While another quiet day is expected, ahead attentions will turn to today’s Inflation Report Hearing and Public Sector Net Borrowing.

USD, EUR, JPY

Markets offered little to excite movement through trade on Monday as U.S investors enjoyed an extended weekend in observance of Presidents Day, ensuring volumes remained thin and price action muted through much of session. The Euro edged marginally higher as the 19 nation combined unit shrugged off advances by far right presidential candidate Marine Le Pen holding onto gains above 1.06. While the cloud of political uncertainty weighs heavy on the Euro the impact in financial markets seems focussed on bonds rather than currencies at this point. Markets are still pricing in a win for Centrist favourite Emmanuel Macron ensuring reasonable support to the downside for the Euro. With U.S markets re-opening today attentions turn to Key Manufacturing and Services data as drivers of Macro movements while political uncertainties shape wider direction.