Daily Currency Update

The Australian dollar was hit hard late last week when valued against its US counterpart after the deputy governor of the Reserve Bank, Guy Debellle hosed down speculation that policy makers were signalling to push interest rates higher. Directing comments specifically at meeting minutes which were released a few days prior, Mr Debelle stressed that there was no new policy conclusions to be drawn and that monetary positions remain neutralised and overall balanced in the near-term. Despite falling to a session low of 0.7874 the Australian dollar still manages to open the new week above the 79 US cents mark, currently swapping hands at a rate of 0.7905. Mid-week, domestic CPI figures remain the highlight over the coming days as does the FOMC meeting which starts Wednesday evening.

The New Zealand Dollar has once again found upside when valued against its U.S counterpart on Friday, the pair saw fresh 10-month highs late in the New York session and traded as high as 0.7459. Friday’s local data releases did little to the Kiwi with total credit card spending in New Zealand increasing for the fourth straight month in June up 0.2% and Visitor Arrivals also reached another record month. The official figures showed a net migration of a record 72,300 in the year to June, 131,400 people arrived and 59,100 left. The economic data is very light this week with only Trade Balance due out on Wednesday. The NZD/USD pair could re-test 0.7485 a Sept 16th peak in the next few days.

The Greenback finished the week down almost 1 per cent against its major counterparts amid the resignation of White House Press Secretary Sean Spicer on Friday. The Euro gained 1.6 per cent on Thursday night following the ECB monetary policy meeting. President Draghi said that the ECB remains far from achieving its mandate to get inflation around its target of 2%. The EUR/USD pair settled at its highest level since August 2015 at 1.1674, up for  a second consecutive week. This week all eyes will be on Wednesday’s US Federal Reserve monetary policy meeting. The market is still expecting at least one more rate hike pending for this year. The EUR/USD pair is currently trading at 1.1673. We now expect support to hold on moves approaching 1.1620 while any upward push will likely meet resistance around 1.1715.