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Markets Steady ahead of Non-Farm Payrolls

BY JOEL HOLMES

The Australian Dollar traded in a tight range in overnight trading, oscillating between 0.7914 and 0.7964 to open this morning at 0.7951. Despite lacklustre PMI numbers coming out of the US, the Aussie struggled to capitalise and treaded water within this range ahead of a jammed-packed Friday that sees action on both sides of the pair. First cab off the rank lands with the RBA and their monetary policy statement. Considering the broader context of the RBA’s cash rate policy stance, any guidance will be under heavy scrutiny by traders. Following the statement, the Aussie looks to retail sales numbers for further direction. To close out the week, the Greenback turns to unemployment data for further momentum in the exchange rate. 

The New Zealand Dollar traded within a tight band in overnight trading hitting a high of 0.7450 and a low of 0.7390. Opening this morning at 0.7435, the Kiwi’s value remains virtually unchanged from yesterdays’ reading. With a quiet day ahead in store on the local economic calendar, the New Zealand Dollar turns to a packed Friday during the American session with non-farm employment numbers due for release. Elsewhere, the Kiwi posted modest gains and losses across the board and mostly held its value against the major currencies. Trading against the GBP slightly higher at 0.5662, the Kiwi benefitted from a dovish rate guidance from the Bank of England. Across the Tasman, the Kiwi remains stagnant at 0.9350 ahead of the RBA’s policy statement slated for release later today. 

The Great British Pound is weaker this morning when valued against the Greenback reaching a 24-hour low of 1.3112. The pound sterling fell 0.8 per cent overnight after the Bank of England downgraded its 2017 UK growth forecast to 1.7pc, a 0.2 percentage point fall. As expected the Central Bank left official interest rates unchanged at record lows of 0.25%. There are no macro-economic data releases due out on Friday. The GBP/USD pair is currently trading at 1.3138. We now expect support to hold on moves approaching 1.3100 while any upward push will likely meet resistance around 1.3160.

 

The U.S. dollar was largely unchanged despite ISM Non-Manufacturing PMI disappointing the market after missing expected growth targets for the month of 53.9 vs 57.4. Both Services PMI and Unemployment claims were steady as the U.S Dollar index fell slightly by 0.1% for the day. EUR/USD was slightly higher for the day due to greenback weakness, just failing in its attempt to reach 1.19, with the Euro supported by an uptick in European retail sales for the month of June. USD/JPY dropped to session lows from 110.80 to an intraday low of 109.90 with the 110 to be tested this evening with the release of non-farm employment change and the latest unemployment rates in the United States.