:: Australian Dollar: The Australian Dollar opens higher on Wednesday at 0.7935 after a renewed bout of greenback weakness overnight as concerns swept offshore markets that the US Federal Reserve may hose down expectations of an interest rate increase this year in an attempt to lower borrowing costs. The Aussie hit a 24-hour low of 0.7788 very late in the local session on Tuesday ahead of a sharp rally during the New York time zone as the market moved back into higher yielding currencies. There is no local economic data due for release today and a quiet day, compared to recent standards, is expected ahead of tonight's interest rate decision in the United States. Most economists are tipping that US rates will be left on hold in the target ra nge of 0 – 0.25 per cent.
- We expect a range today in the AUD/USD rate of 0.7880 to 0.7975
:: Great Britain Pound: Pound Sterling opens higher against the greenback at 1.6453 but the gains were muted as it fell sharply against the Euro after Bank of England Chief economist Spencer Dale said a weaker currency was a “key channel” to spur economic growth. The market used these comments as an excuse to sell sterling. Against the US Dollar, the pound has risen 12 per cent rise over the last three months. Meanwhile, the pound is slightly lower against both the Australian Dollar (2.0700) and the New Zealand Dollar (2.5700).
- We expect a range today in the GBP/AUD rate of 2.0640 to 2.0800
:: New Zealand Dollar: The New Zealand Dollar opens higher today at 0.6390 and tracked the Euro and the Australian Dollars higher as sentiment turned away from the greenback once more. The kiwi rallied as high as 0.6416 during New York trade as the market sold greenbacks in the lead-up to tonight's US Federal Reserve interest rate decision where benchmark rates are expected to be left on hold in the range 0 – 0.25 per cent. NZ markets will focus their attention on the wide range of local economic data due out this week starting with today's release of the second-quarter consumer confidence index.
- We expect a range today in the NZD/USD rate of 0.6300 to 0.6410
:: Majors: The greenback fell across the board on Tuesday night, reversing most of the previous session's gains, as concerns swept the market that the US Federal Reserve will start to hose down expectations of an interest rate increase this year in an attempt to lower borrowing costs. The Euro opens at 1.4077 in Sydney on Wednesday having rallied from an overnight low of 1.3827. In the United States tonight, Federal Reserve officials meet to discuss benchmark interest rates which are likely to be left in the range of zero to 0.25 per cent. Economic data released overnight revealed that existing home sales in the US have fallen 17 per cent from one year ago. Meanwhile, the big dollar has moved slightly lower against the Japanese Yen and opens this morning at 95.16.
:: Data Releases:
- AUD: No Data Today
- CAD: No Data Today
- EUR: Euro Zone current account, April
- GBP: No Data Today
- JPY: Merchandise Trade Balance, May
- NZD: Consumer Confidence, Q2
- USD: FOMC Rate Decision, June; Durable Goods Orders, New Home Sales, May