:: Australian Dollar: The Aussie dollar began the week on a softer note drifting lower in Asia from its early morning high around 0.8680 eventually testing support at 86 cents in early offshore trade. A move out of riskier assets heading into the FOMC meeting and a pullback in commodity prices weighed on the AUD which reached an eventual low around 0.8590. North American pared back some of the losses to push the Aussie dollar back to this morning's open around 0.8630 against the Greenback.
- We expect a range today in the AUD/USD rate of 0.8580 to 0.8660
:: Great Britain Pound: The Pound Sterling received a much welcomed boost in early London trade following the release of house price data from Rightmove. Asking prices for UK homes have increased 0.6% in September reversing the previous months 2.2% fall in a sign that property owners are more confident about achieving higher prices. The GBP/USD retested critical longer term support levels towards 1.6100 but bounced back from a low of 1.6132 to open this morning back above 1.6200. With the Aussie dollar drifting lower the GBP/AUD cross rate opens marginally above yesterdays Asian lows of 1.8705 at 1.8780.
- We expect a range today in the GBP/AUD rate of 1.8720 to 1.8820
:: New Zealand Dollar: The Kiwi dropped in Asian trade yesterday as investors trimmed back short U.S dollar positions ahead of Wednesday's U.S Federal Reserve Bank meeting. European traders sold the NZD/USD lower as well retesting the psychological 70 cent handle only to hold around 0.7020 and open this morning at 0.7065. Today's second quarter current account balance is expected to show some reduction in the deficit with economists predicting a figure of around 1.3 billion NZD.
- We expect a range today in the NZD/USD rate of 0.7020 to 0.7100
:: Majors: With no European economic data released overnight the major currencies took direction from moves in commodity markets and position adjustments heading into what looms as an important week for the Greenback. Investors have been extremely bearish the big dollar with the majority of market participants trading from the short side over recent weeks. Traders remained nervous about the possibility of what is commonly referred to as a short squeeze this week should the U.S Federal reserve bank hint at reversing its quantitative easing program when they meet this week, a move we see as premature and unlikely at this stage of the economic cycle. The U.S dollar gained ground against the Euro and Yen climbing to 1.4610 and 92.45 prior to the release of the August leading indicators report. The indicator is based on ten key measures thought to precede changes in the economy and with no other key data scheduled for release the smaller than expected 0.6% increase provided impetus for a reversal of the overnight gains in the big dollar. This morning sees the U.S dollar open marginally below the 92 handle against the Yen and 1.4675 Euro.
:: Data Releases:
- AUD: No Data Expected today
- NZD: Q2 Current Account Balance & Q3 Consumer Confidence
- USD: Sep Richmond Fed Manufacturing& Jul House Price Index
- GBP: No Data Expected today
- EUR: No Data Expected today
- JPY: Bridge Holiday
- CAD: Jul Retail Sales