:: Australian Dollar: After gapping lower in early Monday morning trade yesterday the Aussie was unable to “fill the gap” back above 81 cents in Asia trading sideways for the majority of the session to enter early offshore trade around 0.8070. European investors immediately dumped riskier assets following a fall in the Euro dollar with the psychological 80 cent barrier tested and eventually giving way to a wave of U.S dollar buying. After reaching an eventual low near 79 cents this morning sees AUD/USD exchanging back around 0.7950 ahead of the release of the RBA board minutes from the June 2 meeting where interest rates were kept on hold.
- We expect a range today in the AUD/USD rate of 0.7900 to 0.7980
:: Great Britain Pound: Following a promising start to the overnight session for the Cable demand for the Greenback surged after comments from Russian Finance Minister Kudrin contradicting calls earlier in the year from officials pushing for a new global reserve currency. The news saw the Pound Sterling fall below 1.6250 to retest last weeks low of 1.6240 only to hold and open this morning back around 1.6300 in exchange with the Greenback. A sharp drop in risk sentiment sees the Aussie dollar open lower this morning, helping the GBP/AUD cross rate to rally and trade marginally above 2.0500 at the time of writing.
- We expect a range today in the GBP/AUD rate of 2.0380 to 2.0580
:: New Zealand Dollar: A 0.9% drop in first quarter New Zealand Manufacturing Activity added to the negative sentiment surrounding the Kiwi in local trade yesterday that saw NZD/USD fall to 0.6370 in late Asian trade. Offshore markets continued the theme as a resurgent Greenback added to the selling pressure triggering further downward moves in the Kiwi to an eventual low a shade below 0.6280. U.S equity markets tumbled some poor economic data reviving the flight to safety or risk aversion story.
- We expect a range today in the NZD/USD rate of 0.6250 to 0.6320
:: Majors: The U.S dollar continued to bounce back overnight rallying in a big way against the other majors. With employment across the 16 countries comprising the “Euro-zone” dropping for the third consecutive quarter by 0.8% in Q1 this year EUR/USD came under strong selling pressure right from the outset in overnight trade. Despite some poor U.S economic data in the form of NY Empire manufacturing and TIC flows the market snapped up the Greenback following comments from the Russian Finance Minister. In what appeared to be an about face Alexei Kudrin showed support for the Greenback as the global reserve currency whilst being interviewed on television, sparking a jump in the big dollar. Adding fuel to the move was a drop in U.S equities which instigated a move back into what has become known as the safe haven trade, long USD. The Euro opens this morning in Asia down from 1.3950 at 1.3785 whilst the Japanese Yen remains firm at 97.80 ahead of the Bank of Japan meeting today.
:: Data Releases:
- AUD: RBA Board Minutes
- NZD: No Data Expected today
- USD: May PPI, May Housing Data & May Industrial Production
- GBP: May CPI & May RPI
- EUR: May CPI, Jun ZEW Survey & Q1 Labour Costs
- JPY: BoJ Meeting
- CAD: Q1 Labour Productivity