Australian Dollar
The Australian dollar rallied to a near 4 month high against its US Counterpart in early morning trade overnight as riskier backed assets gained on hopes that the ECB will shortly take decisive action in European Bond Markets in an attempt to lower borrowing costs for struggling nations such as Italy and Spain. Trading to an overnight high of 1.0592 the Australian dollar has subsequently managed to shed all of its earlier gains opening this morning relatively unchanged at 1.0565. Given its solid day of consolidating the gains witnessed late last week investors attention will turn the RBA’s interest rate decision today, with range bound trading expected leading up the anticipated decision in which the Central Bank is most likely to keep the official cash rate unchanged at 3.50 percent,

We expect a range today of 1.0510 – 1.0620

New Zealand Dollar
Global stocks rallied across the board overnight as the majority of US Companies escaped the most recent reporting season unscathed. With some solid money flows being witnessed into equity markets higher yielding currencies like New Zealand’s dollar have significantly benefitted from the more upbeat sentiment which defined markets late last week. With the highly anticipated unemployment reading not due out until Thursday this week highs were witnessed overnight around 82.20 US Cents as the German Government publically backed the ECB’s bond-buying plan. Meanwhile this morning the Kiwi opens close to those highs swapping hands at a rate of 81.96 against its US Counterpart.

We expect a range today of 0.8150 – 0.8240

Great British Pound:
Providing further evidence of a weakening British economy UK House Prices fell in July for the first time in three months according to mortgage lender Halifax. Adding to the likelihood the Bank of England will lower its growth outlook when Mervyn King presents his quarterly forecasts this coming Wednesday, Policy Makers have clearly struggled in kick starting any type of recovery. On the currency front the Great British Pound has experienced a relatively quiet 24 hour period trading between a range of (1.5546 -1.5666) against its US Counterpart as it opens only slightly lower at 1.5600. Meanwhile on the cross-rates the story was a similar one as the Sterling opens very close to yesterdays levels against both the Aussie (1.4764) and the Kiwi (1.9027)

We expect a range today of 1.4720 -1.4800

Majors:
In a relatively positive session across global markets overnight the S&P 500 Index rose to a 3-month high after German Chancellor Angela Merkel’s government made an announcement publicly supporting the ECB’s bond-buying plan. With news circulating that ECB President Mario Draught will start purchases of short-dated bonds of Italy and Spain in an attempt to lower borrowing costs the news was overall very well received by investors. Helping take the shared unit higher overnight the Euro has traded between a 24 range of (1.2340 – 1.2442) against its US Counterpart as it opens only marginally stronger this morning at 1.2399. Despite the European focus overnight US Fed Reserve Chairman Ben Bernanke whilst failing to address monetary policy specifically during a conference speech yesterday he was keen to point out that regardless of the many indicators that are pointing towards recovery, such releases may fail to measure the suffering of individual citizens as unemployment has remained at 8 percent or higher for more than 3 years. On the outlook this week key indicators out of China specifically CPI, Industrial Production and Trade Balance figures will be the main focus later in the piece.

Data releases

AUD:
Cash Rate, RBA Rate Statement

NZD: Labour Cost Index q/q

JPY:
No data today

GBP: Manufacturing Production m/m

EUR:
Italian Prelim GDP q/q, German Factory Orders m/m

USD:
No data today

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