The Australian dollar started feeling a little acrophobic yesterday, and after trading near four and a half month highs for well over a week now the local unit has slipped lower. Falling along with both gold and copper prices overnight, the Aussie dipped below 1.0500 briefly before recovering to start today’s session at 1.0515. The local calendar sees NAB business confidence figures as well as new motor vehicle sales figures this morning, however the main focus today will be on euro-zone growth figures this evening. After a successful Italian debt auction yesterday the euro is slightly better placed heading into these figures, a noticeable move on the cross rate saw the EUR/AUD touch 1.1750 (0.8511) and record a 0.7% increase for the day.
We expect a range today of 1.0460 – 1.0560
New Zealand Dollar
The local currency in New Zealand weakened yesterday after the country’s finance minister Bill English said a weaker currency unit would be preferable. The New Zealand dollar fell helped along by a slide in commodity prices, from heights of 0.8125 to lows below 0.8080 and by the end of Monday it had recorded an overall 0.4% decrease in value. Retail sales figures this morning will draw the focus of those watching the Kiwi as the core, inflation-adjusted basket of goods is expected to post a 1% increase on prices in the first quarter. A relatively larger slide in the Australian dollar has seen the cross-rate move marginally in the Kiwi’s favour since markets opened this week and the pair sit right on 1.3000 (0.7692) this morning.
We expect a range today of 0.8050 – 0.8140
Great British Pound
Sterling has traded slightly higher in the opening day of this week, rising from 1.5670 to highs above 1.5710 ahead of this evening’s inflation data. With CPI expected to remain within the Bank of England’s target range and produce an annualised figure of 2.3% for the month of July, Sterling has traded rather cautiously in the lead-up. Navigating back below 1.5700, this morning sees levels closer to 1.5680 with RICS house price data also due during Asian hours today. A fall in the antipodean currencies has seen the Pound also rise on the cross rates, banking just over 1.4900 against the Aussie and 1.9380 against the Kiwi.
We expect a range today of 1.4850 – 1.4990
Concerns for global growth has been weighing on financial markets of late and yesterday’s GDP reading for Japan did little to ease these worries. An annualised 1.4% increase in gross domestic product is significantly below the revised 5.5% increase in the first quarter and the Japanese Yen subsequently lost ground against the Greenback with the USD/JPY moving up to 78.35 by New York hours. With euro-zone, French and German GDP scheduled for this evening, concerns for further slowdown in these areas are also weighing sentiment although the shared currency gained following a successful auction of short-term Italian debt. Opening higher this morning, the euro trades at 1.2330 against the US Dollar after touching highs near 1.2370; USD/JPY has settled to trade at 78.30 with the minutes of BOJ’s last meeting also scheduled for release.
AUD: NAB Business Confidence; New Motor Vehicle Sales m/m
JPY: BOJ Minutes; Tertiary Industry Activity m/m
GBP: RICS House Price Balance;
EUR: Flash GDP q/q; French/German Prelim GDP q/q; German ZEW Economic Sentiment
USD: Core Retail Sales m/m; PPI m/m
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