Asia

26 Jun 2014
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26 June 2014 – Greenback lower, AUD strengthens (OZ FOREX)

By Michael Judge

Australian Dollar:

The Australian dollar once again finds itself trading up above the 94 US Cents mark upon open this morning with demand for the domestic unit being bolstered by a greenback which was sold across the board. Managing to capture gains worth more than half a cent US economic reports overnight raised fresh concerns over the health of the world’s largest economy hence triggering a US dollar sell off. In what’s been a week dictated by extremely low levels of volatility,  thus far the historically riskier growth linked currencies have been unaffected by the ongoing geopolitical tensions in Iraq and the Ukraine. This morning the Australian dollar buys 94.03 US Cents.

We expect a range today of 0.9370 – 0.9440

New Zealand Dollar:

The New Zealand dollar has been a major benefactor of a broad based US sell-off overnight, a sell-off triggered by two key reports (GDP and Core Durable Goods) which both missed their mark. Having initially appeared to have been in a subdued mood intraday the New Zealand dollar took off from an earlier low of 0.8660 comfortably passing through a critical juncture at the 87 US Cents mark reaching an eventual high of 0.8740 when valued against the Greenback. Maintaining those gains upon this morning traders will now be eyeing further macro developments from the United States this evening.

We expect a range today of 0.8700 – 0.8770

Great British Pound:

It has been a relatively uneventful 24 hour period for the Great British Pound with UK stocks weighed down by offshore geopolitical uncertainty. Drifting between a low of 1.6951 and a high of 1.7003 when valued against its US Counterpart the Great British Pound has struggled for direction overall failing to capitalize on the underlying US Dollar weakness witnessed overnight. With no clear domestic drivers on hand the Sterling opens virtually unchanged this morning at a rate of 1.6982. In what’s set to be a closely watched press conference this evening all eyes will be on Mark Carney as he presents the Financial Stability Report. In other currency moves the Sterling is weaker against both the Aussie (1.8054) and the Kiwi (1.9420) upon open this morning

We expect a range today of 1.8020 – 1.8090

Majors:

Dominating FX flows overnight, the US dollar Index, which measures the greenback against a basket of currencies touched a five week low. In a move triggered by a report which showed US Gross Domestic Product shrank by 2.9 percent during the first quarter, the worst quarterly reading since 2009, sentiment was further tarnished after numbers also showed the production of core durable goods fell by 0.1 percent in May.  Indicative of the broader moves witnessed overnight it comes as no surprise to see the Greenback weaker against the Euro (1.3628) and the Yen this morning (101.818) with investors once again set to eye key data releases from the United States tonight, a strategy likely to drive direction over the coming 24 hours.

Data releases

AUD:

No data today

NZD: No data today

JPY:

No data today

GBP: BOE Gov Carney Speaks, BOE Financial Stability Report

EUR:

No data today

USD: Core PCE Price Index m/m, Personal Spending m/m

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