AUD/USD 0.9970 – 1.0050
NZD/USD 0.8250 – 0.8310
GBP/AUD 1.5310 – 1.5370
Australian Dollar fundamental analysis: Ending a nine-month stint in which the Australian dollar traded above parity against its US Counterpart, the higher yielding asset tumbled to a low of 0.9961 during the New York Session overnight Friday, its lowest level in close to a year. Capping off a wild week for the Australian dollar which last Monday opened at a rate above 1.03 it's been the broader surge in the US dollar which has caused the majority of the damage. Despite an upward surge on Thursday following the release of improved employment figures locally, investors have swamped the Greenback over the past 3 days of trade amid renewed confidence that the world's largest economy is finally starting to react to the record levels of stimulus which have been thrown at it. Looking ahead this week a string of key releases out of the US will be critical in determining whether the US dollar rally has been overdone. Meanwhile this morning the Aussie is significantly lower opening at a rate of 1.0001
New Zealand Dollar fundamental analysis:
Triggering a large scale move back into US dollar denominated assets on Friday, investors jumped on the Greenback as markets speculated on a potential end to quantitative easing. Although the timing remains unclear, a slow tapering off the money supply would notably improve the value of the US dollar, hence weighing on the prospects for New Zealand's currency. After starting the day at a rate of 0.8445 the New Zealand dollar was sold across the board on Friday as it opens this morning around 150 basis points lower currently buying 82.84 US Cents. On the horizon this week, given such a significant rally in the US dollar, data flows out of the world's largest economy will need to be solid in order to sustain and justify the move
Great British Pound fundamental analysis : Similar to a handful of other major pairs on Friday the Great British Pound suffered at the hands of a notably stronger US dollar. In terms of data on Friday there was very little on offer around the globe with the weekend talks of the Group of Seven Nations garnishing the majority of investor's attention. Signalling that European policy makers are open to the notion of increased monetary aid ironically it was speculation of reduced aid from the US Federal Reserve which sees the US dollar outstripping all of its major counterparts this morning. Tumbling to overnight lows of 1.5313 when compared against the Greenback the Sterling is weaker this morning at 1.5353. Meanwhile on the cross rates, the Great British Pound is stronger against both the Aussie (1.5346) and the Kiwi (1.8518).
Global markets fundamental and Majors currency news: Dominating flows across currency markets on Friday the US dollar surged late last week evidenced by the biggest weekly advance in the Dollar Index since November 2011. Triggering the move and acting as the biggest catalyst for ongoing volatility, investors continued to speculate the US Federal Reserve will at some stage look to step back from the endless amounts of stimulus that have been witnessed. Whilst the true source of the strength may be vague, retail sales which are expected to be released from the world's largest economy this evening will be the Greenback's first real test to see whether investors are once again running ahead of the curve. Given the large move into the US dollar it should come as no surprise to see the USD/JPY trading close to a four and a half year high this morning at a rate of 101.836 whilst the Euro has also lost out in a big way as it opens weaker at 1.2971.
Source: ozforex
Data releases
AUD: Home Loans m/m, NAB Business Confidence
NZD: REINZ HPI m/m, FPI m/m
JPY: No data today
GBP: No data today
EUR: Italian 10-y Bond Auction, Eurogroup Meeting
USD: Core Retail Sales m/m, Retail Sales m/m, Business Inventories m/m, Mortgage Delinquencies
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