:: Australian Dollar: The Australian goods and services balance printed a trade surplus of 3.54 billion in June annihilating expectations of 1.81 billion. The massive surplus was driven by growth in exports as Chinese demand spurred exports of coal and iron ore while imports remained more conservative. This was the biggest trade surplus on record and the third positive number in a row. Housing prices also grew beyond expectations indicating that Australian economic growth remains robust pushing the Aussie to 0.9145 US. Offshore, better-than-expected US data improved market sentiment prompting investors to continue buying the Aussie. Demand saw the Australian Dollar again setting new 3 month highs at 0.9180 against the Big Dollar. This morning the Aussie starts the day buying 0.9165 US.
- We expect a range today in the AUD/USD rate of 0.9120 to 0.9190
:: Great Britain Pound: The Pound's 9 day winning streak against the Greenback broke after a report showed U.K. services growth slowed to the lowest in 13 months in July. The index was 53.1 in July, dropping from June''s 54.4 and falling short of the 54.5 estimate. The Sterling dipped to 1.5891 early offshore before recovering to 1.5960 US following Lloyds Banking Group Plc, Britain's largest mortgage lender, reporting a profit for the first time since its acquisition of HBOS Plc. The US Dollar soon snapped back the gains after the ADP employment change showed 42,000 new jobs and the ISM services gauge grew at a faster pace than forecast. The Pound opens weaker today buying 1.5888 US, 1.7328 Aussie and 2.1614 Kiwi.
- We expect a range today in the GBP/AUD rate of 1.7300 to 1.7360
:: New Zealand Dollar: Following Australia's massive trade surplus figures the Kiwi broke 0.7350 US as it followed its trans-Tasman rival higher throughout the local session. Moving offshore the Kiwi slumped below 0.7300 US after Asian stocks declined, damping investor appetite for the South Pacific nations' assets early in the evening. Figures from the US provided support for the New Zealand Dollar with US report growth in jobs and services sector. The Kiwi opens at 0.7340 versus the US Dollar ahead of today's Kiwi unemployment data. On the cross rates, the kiwi opens today a shade above 0.8000.
- We expect a range today in the NZD/USD rate of 0.7310 to 0.7375
:: Majors: The big dollar hit fresh 8 month lows reaching 85.33 against the Japanese Yen on speculation the Fed will take further quantitative easing measures following growing evidence of a slowing US economy. While lower yields reduce the government's borrowing costs, excessive currency movements are undesirable and can have a negative impact on the stability of the economy and finance said Japanese Finance Minister Yoshihiko Noda. '[He] will continue to monitor developments in markets more carefully' as the Dollar/Yen edged lower offshore. Meanwhile, retail sales across the EMU remained flat in June while the annual grew 0.4% exceeding expectations. The aftermath spurred the Euro to an overnight high of1.3230 against the Greenback. The Dollar gained for the first time in 3 days versus the Euro sending it down to 1.3130 after reports showed the U.S. added more workers and service industries grew faster in July than forecasted.
:: Data Releases:
- AUD: RBA Quarterly Monetary Policy Statement
- EUR: German Factory Orders, June
- GBP: Bank of England Rates decision
- JPY: No Data Today
- NZD: Unemployment rate, Q2
- USD: Initial jobless claims, W/E July 31