Daily Currency Update
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Central banks in focus, all eyes on RBNZ and BoE
BY MATT RICHARDSON
Australian Dollar
AUD / USD
0.7320 – 0.7420
The Australian Dollar opened this morning little changed when valued against its US Counterpart with the pair retreating from an overnight high of 0.7394. Failing to hit the 0.7400 figure. There was no macro-economic data released yesterday. Today we will see the release of consumer inflation expectations for the month of May during the upcoming session, latest from the previous month at 4.1%. The Aussie has fallen 0.45 per cent against the greenback to an overnight low of 0.73.33 US cents. The AUD/USD pair is currently trading at 0.7349. We now expect support to hold on moves approaching 0.7320 while any upward push will likely meet resistance around 0.7385.
New Zealand Dollar
NZD / USD
0.6780 – 0.6950
As widely expected the RBNZ this morning has kept the cash rate at low 1.75%, the central bank has not moved since November last year in a bid to support inflation and economic growth. They said that the outlook for growth does remain positive which is supported by the low interest rate, strong population growth and high levels of household spending and construction activity. The central bank also stated that ‘monetary policy would remain accommodative for a considerable period’, the NZD/USD dropped from 0.6939 to 0.6823 immediately as comments suggest that interest rates are unlikely to be lifted in the near-term. Governor Wheeler is due to testify on the Monetary Policy Statement a little later this morning.
Great British Pound
GBP / AUD
1.7500 – 1.7700
The Great British Pound remains range bound ahead of this evenings Bank of England Interest rate decision. Trading flat during the Asian session, the Sterling gained momentum to an overnight high of 1.2987 before a round of selling pressure saw intraday gains paired. Cable sits at 1.2935 on open this morning before a raft of local economic data is released in the UK this evening. Manufacturing Production leads the way before the critical BoE inflation report and Official Bank Rate is released. It is expected that interest rates will be kept on hold at the benchmark rate of 0.25%, although the GBP/USD cross could test psychological resistance at the 1.3000 handle should inflationary pressures to continue to rise. The Great British Pound opens steady against the Australian Dollar – 1.7590 and higher against the New Zealand dollar – 1.8950.
Majors
USD, EUR, JPY
N/A