In another week of carnage across markets the Australian dollar consolidated on Friday, trading between a tight range of 0.9725 – 0.9798 against its US Counterpart. Investors remained reluctant to buy the higher-yielding asset for much of Friday given the Memorial Day long weekend in the US as warnings about Greece also kept potential buyers at bay. With very large question marks also remaining over Spain’s ability to cope with a potential Greek exit the Australian dollar looks on shaky ground as it opens at a level below parity for only the second week this year. Trading to a low of 0.9689 last week, the 97 US Cents mark remains crucial. Looking ahead this week Retail Sales figures due for release Wednesday remain the highlight for the domestic calendar with uncertainty likely to remain high given the likelihood of further flare ups out of Europe. Meanwhile this morning the Aussie dollar opens at very similar level to where we left it Friday, currently swapping hands at a rate of 0.9753
Shown are 100-euro banknotes laying atop various Swiss franc notes in this picture illustration at a bank last July 18 in Warsaw, Poland.
We expect a range today of 0.9720 – 0.9800
New Zealand Dollar
The New Zealand dollar traded higher for much of Friday’s local session, snapping a week of heavy losses against its US Counterpart. After starting the day at a rate of 0.7530 the Kiwi found some strong support around such levels as investors appeared keen to jump on the higher yielding asset. Trading to a late afternoon high of 0.7585 the move higher was relatively short-lived however as news flows out of Europe again killed any hope of consolidating such gains. Given the concerns over Spain’s banks, ratings agency Standard & Poor downgraded one of the Nation’s largest lenders to junk status whilst concerns continue to mount that Greece are moving closer to electing a anti-bailout party, amplifying the risks of eventual Euro exit. In what is shaping up as another week of uncertainty across global market the kiwi currently buys 75.29 US Cents.
We expect a range today of 0.7480 - 0.7580
Great British Pound
The Great British Pound declined for a fourth straight week against its US Counterpart, the longest losing streak since September as the Sterling continues to be hampered by debt concerns out of Spain as well Greece’s future in the 17-Nation pact. With speculation again mounting that the Bank of England will restart its program of Asset purchasing in an attempt to stimulate growth, the overall bearish market has taken the shine off a recently attractive Sterling as it traded to an overnight low of 1.5629 against its US Counterpart, a long way from its highs above the 1.61 level seen earlier in the month. Given the US long weekend volumes are likely to remain down over the coming 24 hours as investors stop to take a breath. Meanwhile this morning the Sterling opens relatively unchanged against both the Australian dollar (1.6041) and the New Zealand dollar (2.0758).
We expect a range today of 1.5990 – 1.6090
Whilst European Stocks posted their first weekly advance in a month the 17 Nation Euro continued its shocking run losing further ground against its US Counterpart. In a string of ordinary of news flows out of Europe on Friday Greece’s anti-bailout party gained at the polls, adding to the high level of uncertainty surrounding Greece’s future within the Euro. Further compounding the woes of the shared Unit, The Bankia Group, the same lender Spain nationalized this month has sought 19 billion Euro’s of state funds in an attempt to minimise stresses as rating agency Standard & Poor downgraded the Bank’s credit status to junk. Falling to overnight low of 1.2544 against its US Counterpart the Euro opens this morning more than a full US Cent weaker at a rate of 1.2514. Given markets remain very shaky better than expected Consumer Sentiment results out of the US were not enough to shift overall sentiment which is likely to favour safe-haven units such the Greenback for the week ahead. Meanwhile this morning the US Currency opens stronger against the Japanese Yen at a rate of 79.643 with many investors enjoying a long-weekend today given bank holidays in Germany and France as US markets also remain closed for Memorial Day.
No Data Today
NZD: No Data Today
Monetary Policy Meeting Minutes
GBP: Nationwide HPI m/m
German Import Prices m/m
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