Waning US optimism prompts heavy USD sell off

AUD / USD

Expected Range: 0.7390 – 0.7540

The Australian dollar rally continued through trade on Thursday pushing through resistance at 0.7470 and breaking back above the psychological 0.75 handle. The AUD touched intraday highs at 0.7519 before profit taking forced the commodity currency marginally lower. The Australian dollar has been the best performing major currency through the year thus far buoyed by broader USD weakness. Waning optimism surrounding President Elect Donald Trump’s ability to deliver concise pro-growth policies has hampered the USD upward trajectory and a spill over into Thursday trade helped extend AUD upside. With a sense of nervousness creeping into markets USD bulls are looking to correct positions, consolidate existing long positions and take profits. With little local data on hand throughout trade today attentions again turn to US sanguinity and a heavy macroeconomic docket for direction into the weekend. 

NZD / USD

Expected Range: 0.7030 – 0.7190

The New Zealand dollar rallied through trade on Thursday surging through 0.71 U.S cents as broader Greenback weakness forced investors to correct USD holdings. With little domestic data on hand to drive direction the Kiwi took advantage of waning optimism surrounding President Elect Donald Trump and his ability to deliver pro-growth policies when in office. Touching intraday highs at 0.7144 the NZD has broken through key resistance at 0.7030 and 0.7133. A consolidated push above 0.7130 could open moves toward 0.7190 and 0.7200 as attentions turn to a heavy U.S macroeconomic docket and continued fluctuations in optimism for direction through trade on Friday. 

GBP / AUD

Expected Range: 1.6025 – 1.6425

The Great British Pound has once again suffered under heavy selling pressures as markets reversed early gains through trade on Thursday. The GBP moved through 1.23 to touch intraday highs at 1.2315 buoyed by broad based USD weakness before escalating Brexit fears forced the beleaguered unit back below 1.22 to 1.2150. Investors are wary of extending upside gains as the threat of a hard Brexit from Europe looms ever larger. Having slipped below 1.21 for the first time since October earlier this week the door to deeper downward corrections has been opened and a consolidated move and close below this key resistance point could trigger a run below 1.20. With a dearth domestic economic docket limiting macroeconomic influence attentions today remain ongoing Brexit developments with key US data sets and waning Trump optimism guiding direction.

USD, EUR, JPY

The US Dollar sell off continued through trade on Thursday as optimism surrounding President Elect Donald Trump begins to wane. The Dollar fell to five week lows suffering losses against a basket of major currency counterparts moving through 114 JPY to touch session lows at 113.80 while the Euro rallied through 1.06 and 1.0650 to touch intraday highs at 1.0680. Investor’s disappointment over Trump’s failure to offer any insight into his plans for tax reform, fiscal stimulus and deregulation left investors wanting and questioning whether the Republican president would push through the pro-growth campaigns promised along the election trail. The lack of policy detail encouraged investors to look to safety plays and other high yielding asset classes compounding the recent USD sell off. Attentions now turn to a heavy macroeconomic docket and continued swings in optimism for direction through trade on Friday.