25 Jun 2014

25 June 2014 – Data flows favour a stronger Greenback (OZ FOREX)

By Michael Judge

Australian Dollar:

Proving just how thin the air remains up above the 94 US Cents mark the Australian dollar has fallen overnight on reports of escalating tensions in the Middle East, tensions which favoured a move back into the world’s reserve currency. With the US dollar strengthening across the board the Aussie slumped to an overnight low of 0.9365, more than a half a cent lower than its opening level of 0.9420. Weighed down also buy a string a positive data releases from the US the Australian dollar currently buys 93.65 US Cent as investors now look towards comments from the RBA Deputy Governor Phillip Lowe who is scheduled to speak in Melbourne this afternoon.

We expect a range today of 0.9330 – 0.9390 

New Zealand Dollar:

Despite a relatively flat start to the day the New Zealand dollar has been sold when valued against its US Counterpart overnight, struggling to maintain levels in excess of the 87 US Cents mark. Tumbling to overnight lows of 0.8669 the main catalyst for the move lower came after figures showed the sale of new US homes surged by a staggering 18.6 percent in May, the largest gain since January 1992. Losing ground against a broadly stronger Greenback the Kiwi opens lower this morning as it buys 86.71 US Cents.

We expect a range today of 0.8640 – 0.8700

Great British Pound:

Tempering expectations surrounding future interest rate increases Bank of England Governor Mark Carney stated overnight that developments on the wage front has suggested to Policy makers that there remains excess spare capacity throughout the labour market.  Disappointing some investors who had been more hawkish on the timing of a contractionary monetary policy stance the Sterling has been sold overnight as a result slumping from a starting point of 1.7025 when valued against its US Counterpart down to a low of 1.6964. Whilst lower against the Greenback at 1.6983 the Sterling is stronger against both the Aussie (1.8130) and the Kiwi (1.9578).

We expect a range today of 1.8100 – 1.8160


The US dollar ended its longest losing streak since April overnight after figures showed the sale of new US homes jumped by a staggering 18.6 percent during May, representing its strongest percentage gain in 22 years. Hinting that the US economy is finally starting to recover at an accelerated pace following a harsh winter consumer confidence figures overnight also pointed in the right direction indicating a steady improvement. Whilst the US dollar advanced against a handful of G10 growth currencies it struggled to make up much a ground when valued against both the Euro (1.3605) and the Yen (101.954) which both open in a familiar position this morning. Taking a look out over the horizon and investors will be eyeing similar trends over the coming days with price action dictated macro developments across the US, developments still not substantial enough to truly change tapering expectations nor the gradient of the yield curve.

Data releases


RBA Deputy Governor Lowe Speaks

NZD: No data today


CSPI y/y 

GBP: CBI Realized sales


Gfk Consumer Confidence

USD: Core Durable Goods Orders m/m, Final GDP q/q

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