Australian Dollar
The Australian dollar has continued higher in the current risk-on environment, breaking 1.0500 against the Greenback for the first time in four months and touching new all time highs against the euro. Although at time of writing the Aussie has slipped back through 1.0500, not yet being able to decisively break through the resistance level with investors well aware of the volatility key central bank meetings are likely to bring later this week. Worth noting down however, is the highs of AUD/EUR which touched near 0.8580 during New York hours and this morning still sits around 0.8560 ahead of what is likely to be a very euro-focused week. Locally markets will be watching building approvals this morning, as well as private sector credit for their influence on the Aussie during onshore hours.

We expect a range today of 1.0440 – 1.0530

New Zealand Dollar
The New Zealand dollar has benefited from the positive sentiment being witnessed in international markets, as confidence towards likely central bank stimulus this week supports the riskier assets. Despite slipping from its highs above 81 cents on this week’s open, the Kiwi still holds at 0.8080 versus the Greenback and worth marking down is the fresh all time highs posted against the euro as the shared currency falters. Banking above 66 euro cents was a yet another psychological level taken out by the Kiwi and this morning NZD/EUR sits at 0.6595 ahead of what is likely to be a very euro-focused week. The Aussie cross rate has slipped however, sitting just above 0.7700 with NZ business confidence figures due for release this morning.

We expect a range today of 0.8030 – 0.8120

Great British Pound
Not a whole lot of movement so far this week for the Pound, with the Olympics gaining the lion’s share of headlines compared with the upcoming Bank of England meeting. For those reading the right publications however they would see although the expectation is for the BOE to hold policy in August, some believe they will need to act in the coming months. Despite this hardly being the fuel for a rally, any upside has been outweighed by a strengthening Greenback ahead of the United State’s own central bank meeting on Wednesday. Currently sitting just above 1.5700, the antipodeans have also pushed the Pound lower with GBP/AUD at 1.4960 and GBP/NZD at 1.9430.

We expect a range today of 1.4900 – 1.5040

Majors
Pledges by European officials and central bankers to do everything they can to protect the eurozone has kept risky assets supported so far this week, although the euro itself is showing weakness. With 3 central bank meetings this week, the ECB,BOE and Fed, talk of stimulus is ripe however strong speculation of ECB support specifically has served to keep the shared currency of the region under pressure. Talk of bond market intervention has helped keep Italian 10-year bond yields under 6% overnight as the government sold at the top of its planned issue range, although an expected contraction in Spanish economic growth pushed EUR/USD lower. Opening this morning at 1.2260, after dipping to 1.2230, the euro faces another set of data releases this evening including unemployment figures, inflation data and German retail sales. The Greenback, although gaining against the euro has slipped against the Japanese Yen and this morning the pair open on intraday support of 78.15. The Fed meeting on Wednesday will be the main risk event for the pair this week, with household spending figures amongst a basket of tier 2 data out of Japan today.

Data releases:

AUD: Building Approvals m/m; Private Sector Credit m/m

NZD: NBNZ Business Confidence

JPY: Household Spending y/y; Manufacturing PMI; Average Cash Earnings y/y; Unemployment Rate

GBP: GfK Consumer Confidence

EUR: Unemployment Rate; CPI Flash Estimate y/y; German Unemployment Change; German Retail Sales m/m; French Consumer Spending m/m

USD: CB Consumer Confidence; Chicago PMI; Personal Spending m/m