Daily Currency Update

Get access to our expert daily market analyses and discover how your currency has been tracking with our exchange rate tools

US Dollar weakness takes a breather

BY JOEL HOLMES

In a decision unanimously anticipated the Reserve Bank of Australia maintained the existing cash rate at 1.5 percent. Whilst the accompanying statement was well neutralised, suggesting a window of monetary policy stagnation over the medium-term, specific mention was given to the strength of AUD with policy makers stating that future exchange rate levels would be a key contributor for economic activity and inflation. Falling in the aftermath the Australian dollar has failed to consolidate levels up above the 80 US Cents mark overnight, opening 0.5 percent lower this morning at a rate of 0.7967.

The Kiwi fell in overnight trading as the Greenback hit back against is detractors. Bundled in with other "commodity" currencies, the Kiwi shed 0.5% from its daily high of 0.7504 in overnight trading. Further compounding the decline this morning were below expectation employment numbers that drove the Kiwi down further from its open price of 0.7470. Now trading at 0.7420, the New Zealand Dollar was also weighed down by dairy prices easing by 1.6% at the latest GlobalDairyTrade auction. Traders now turn to a speech by the Reserve Banks Deputy Governor Grant Spencer for further insight. 

The Great British Pound continued to advance against the Greenback on Tuesday reaching a high of 1.3244 holding gains above 1.3200. On the data front yesterday UK Manufacturing PMI grew at a faster-than-expected for the month of July, up to 55.1, beating expectations of 54.4 and above previous 54.2. UK House price growth was broadly stable in July at 2.9%, only a touch lower than the 3.1% recorded in June. Attentions now turn to today's Construction PMI release with expectations of a slight pull back (543.) from the previous month (54.8). The GBP/USD pair is currently trading at 1.3208. We now expect support to hold on moves approaching 1.3190 while any upward push will likely meet resistance around 1.3250.
 

 

The US dollar saw some relief overnight as the US Dollar index looks to claw its way back from its lowest levels since May 2016, trading slightly higher at 93.05 and up 0.22% for the day. Inflationary measures in the US core PCE release was slightly higher and provided support for a slight reversal in recent USD downward movements. United States Manufacturing PMI came in at expectations with manufacturing prices expanded for the month of July. Despite European area flash GDP growing by 0.6% for the 2nd quarter of 2017, EUR/USD took a breather from its recent highs and pulled back to short term test support at 1.1800 after seeing initial highs of 1.1837. Despite a dip below 110 overnight the USD/JPY cross held firm as Japanese Yen saw weakness on political developments with a reshuffle by Prime Minister Abe this week. ADP Non-Farm Employment figures is the major news release over the next 24 hours.