Following a relatively flat start to the day the Australian Dollar fell as European and US Markets opened amid renewed concern that interest rate cuts around the globe last week will not be enough to trigger a spur in demand. With higher yielding assets being shed across the board, a disappointing US employment reading also did little help its cause. After trading to an earlier high of 1.0292 against its US Counterpart such levels proved too high for the Aussie dollar as we open this morning around 80 basis points lower at a rate of 1.0207. Looking ahead this week the pick of the local economic dockets remains June’s unemployment reading due for release this coming Thursday
We expect a range today of 1.0150 -1.0250
New Zealand Dollar
The New Zealand Dollar fell from some of its highest levels seen in two months against its US Counterpart on Friday as US Unemployment figures came in well below expectation. Re-igniting fears that the world’s largest economy still isn’t recovering at a quicker enough pace, investors will now be looking for further moves out of the US Fed Reserve when they next meet, August 1st. In the absence of the any local data the shift in risk sentiment was enough to pull the New Zealand dollar below the critical 80 US Cents level, reaching a low of 0.7956 against its US Counterpart. Opening this morning at a rate of 0.7975 Chinese Inflationary figures due out this morning are likely to provide a slightly bumpy road for the kiwi over the coming hours with support likely to kick in around 79.50 US Cents
We expect a range today of 0.7925 – 0.8020
Great British Pound:
In what was a shaky session for global markets on Friday the FTSE100 Index fell as did the Great British Pound. Whilst US Non-farms payrolls disappointed markets so too did PPI Input and Output figures which both fell in the month of May. Triggering losses for much of the overnight session on Friday the Sterling drifted to reach an eventual low of 1.5460 against its US Counterpart, opening this morning only slighter stronger at 1.5486. Despite its losses against the Greenback however the Sterling has advanced against a broadly weaker Aussie (1.5164) and Kiwi (1.9401) as it opens stronger in comparison to the riskier back units.
We expect a range today of 1.5120 – 1.5210
Following a week in which the US Federal Reserve threw out more of its “Operation Twist”, the BOE added 50 billion pounds of asset purchases, the ECB Cut Rates as did the Central Bank of China for the second time in a month, keeping all of this in mind and its difficult to see where the next bout of “good news” is likely to come from. With US non-farm payrolls disappointing markets the overall increase of 80 000 came in well below the expected reading of 100 000 which saw the underlying Unemployment rate remain stubbornly high at 8.2 percent. Following the announcement riskier asset got sold as did the EURO which traded as low as 1.2259 against its US Counterpart having started the day at a rate of 1.2390. Given a struggling US Labour Market, the focus for the week ahead is likely to shift towards the reality of minimal global growth as well as ongoing bank recapitalizations throughout Spain and peripheral bond markets in Italy.
ANZ Job Advertisements m/m
NZD: No data today
Economy Watchers Sentiment
GBP: No Data Today
German Trade Balance, Sentix Investor Confidence, ECB Draghi Speaks,
FOMC Member Williams Speaks