An initial relief rally has sent the Australian dollar higher on this morning’s open, gapping higher and touching above 1.0110 as preliminary forecasts show a pro-bailout government is likely to be formed in Greece. Weekend election results are still incomplete and volatility is more than likely still going to play a part as the devil remains in the detail of coalition talks between parties as the day and week progresses. Also, the G20 meetings kick off today, with leaders due to discuss developments in Greece as well as the stability of the euro-zone as a whole. Should risk appetite continue to drive the Aussie higher, resistance around 1.0200 should prove tough to break; a fall to the downside will see support around the psychological parity level for now.
We expect a range today of 1.0080 – 1.0200
New Zealand Dollar
For the first time in over a month the New Zealand Dollar has broken through 79 cents, as global markets currently seem approving of the evolving election results in Greece. Westpac consumer sentiment is due out early morning this morning locally as well and results may influence the Kiwi in a market otherwise very European focused this morning. Currently trading at 0.7910, there is clear psychological resistance at 0.8000 and support on the downside at 0.7850 in the near term. Choppy trade in the AUD/NZD ensues as markets are not quite sure how to relay the weekend’s events into the cross rate; the Kiwi slightly lower than last weeks’ close at 0.7825.
We expect a range today of 0.7870 – 0.7970
Great British Pound
Touching its highest level since May 23, Sterling has rallied higher against the safe-haven Greenback as preliminary relief is witnessed in the markets first thing this morning. A likely pro-bailout coalition looks to be the most likely outcome of the Greek elections this weekend and riskier assets have gained accordingly. Solid resistance appears to be situated at 1.5800 and risk appetite will be mostly responsible for the direction Cable will likely take today. A greater sensitivity to risk gives the Aussie and Kiwi dollars the advantage on the cross rates this morning; GBP/AUD at 1.5520 and GBP/NZD at 1.9850.
We expect a range today of 1.5450 – 1.5600
The euro dollar has opened higher this morning as results from the Greek elections over the weekend continue to be tallied. At time of writing, pro-bailout party New Democracy hold around 30% of the votes and look to likely form a coalition with the Socialist Pasok party; in other polls this weekend the French Socialist party have won an absolute parliamentary majority which allows them to pass legislation without the help of other parties. All positive thus far for risk sentiment, the single currency unit trades at 1.2700 after gapping around 70 points higher from last week’s close. Volatility and uncertainty are likely to remain however as the rest of the votes are counted and the terms and conditions of a coalition attempt to be hammered out; already Pasok are making noise about anti-bailout Syriza being a part of any coalition formed. The Greenback has rallied against its Japanese counterpart, as a seemingly positive step for Europe flows on as positive news for the domestic economic recovery in the US and the safe-haven duo currently change hands at 78.85. Today’s markets will be driven by developing election results in Greece as well as the G20 meetings of world financial leaders due to commence today.
AUD: New Motor Vehicle Sales m/m
NZD: Westpac Consumer Sentiment
JPY: BOJ Monthly Report
GBP: Rightmove HPI m/m
EUR: Greek Parliamentary Election Results
USD: NAHB Housing Market Index
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