:: Australian Dollar: The local unit lost some of its momentum on Friday declining from its early highs above 82 cents to open in Europe around 0.8150. Demand for the Greenback emerged following comments of support for U.S treasuries from the Japanese, a theme that the offshore market pursued ahead of the weekends meeting of G8 finance ministers. Poor European economic data and an increase in U.S consumer confidence saw the Aussie reach a low of 0.8065 before bouncing back to finish the week at 0.8125. Comments about planning for the recovery from the G8 sees the Greenback open a positive note with the AUD/USD gapping down to exchange at Fridays lows around 0.8070 at the time of writing.
- We expect a range today in the AUD/USD rate of 0.7980 to 0.8150
:: Great Britain Pound: With no U.K economic data released the Pound Sterling took direction from movement in the Greenback. Positive sentiment towards the U.S dollar returned on Friday sending GBP/USD down from the Asian close at 1.6530 to an eventual low in late European trade at 1.6325. The main catalyst for the move was a slight increase in consumer confidence out of the U.S as measured by the University of Michigan's confidence survey for the month of June so far. A large drop in the Aussie dollar in early morning trade has seen the cross rate open higher than Friday's close with GBP/AUD exchanging hands this morning as high as 2.0350.
- We expect a range today in the GBP/AUD rate of 2.0220 to 2.0400
:: New Zealand Dollar: In economic data out of New Zealand released on Friday headline Retail Sales remained strong increasing by a larger than expected 0.5% during the month of April. The news triggered an early rally to an eventual high of 0.6465 with relatively strong food price data for the same month adding fuel to the fire. After rallying over 5% from its lows at 0.6150 earlier in the week investors in the region took some profit on the NZD/USD heading into the weekend as it exchanged back at 0.6420 in early Europe. A big sell off on the Euro dragged the Kiwi lower with an increase in demand for the Greenback against all majors taking NZD back to an overnight low of 0.6355. In early Monday morning exchanges the Kiwi is exchanging at 0.6375 and 1.2650 against the U.S and Australian dollars.
- We expect a range today in the NZD/USD rate of 0.6320 to 0.6400
:: Majors: Industrial production in the European region continued its decline with Friday's report for the month of May falling a record 21.6% for the year to date and 1.9% from the previous month. The news came ahead of the weekends G8 meeting of finance ministers which had investors treading cautiously sending the Euro lower against the Greenback. After opening offshore trade above 1.4100 EUR/USD began its descent following the data and reached a bottom below 1.3950. Sentiment towards the big dollar was relatively bullish following a slight increase in the University of Michigan's much publicised preliminary consumer confidence report for June and comments by Japanese officials expressing their confidence in U.S treasuries. Signs of some recent economic stabilisation saw the group of eight finance ministers discuss the possibility of preparing “appropriate strategies for unwinding the extraordinary policy measures taken to respond to the crisis once the recovery is assured”. The comments do signal a shift in rhetoric from previous comments with a level of optimism not seen in some time. This morning sees the Greenback open on a strong note exchanging up from the close against the Euro and Yen at 1.3985 and 98.45 respectively.
:: Data Releases:
- AUD: No Data Expected today
- NZD: Q1 Manufacturing Activity
- USD: June NY Emoire Manufacturing, Apr TIC Flows & June NAHB Housing Market Index
- GBP: No Data Expected today
- EUR: Q1 Employment
- JPY: No Data Expected today
- CAD: Apr Manufacturing Shipments