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AUD gives up gains on RBA comments


It’s been a wild ride for the AUD over the past 24 hours gyrating between a low of 0.7916 and a high of 0.8036 when valued against its US Counterpart. Amid highly liquid trading conditions the Australian dollar managed to give up all of its gains from overnight on Wednesday in the aftermath of comments made by RBA Governor Philip Lowe. Triggering the sell-off Phillip Lowe stated that markets couldn’t rely on accommodative monetary policy forever and that the environment of record low interest rates was nearing an end. Opening a staggering 1.2% lower the Australian dollar currently swaps hands a rate of 0.7932 when valued against its US Counterpart. 

The New Zealand dollar has continued to fade from a position of strength over the past 24 hours, slumping to an eventual low of 0.7298 when valued against its US Counterpart. Whilst recent polling has re-affirmed the National Party’s lead ahead of tomorrow’s vote, currency moves were more influenced by the FOMC for much of Thursday’s session as the Kiwi struggled to keep pace with the world’s reserve currency. Whilst monetary and balance sheet tightening from the United States remains a critical driver over the medium-term, this weekend’s election will have the markets full attention. Opening lower the New Zealand dollar currently buys 73.07 US Cents. 

The Great British Pound is stronger this morning when valued against the Greenback. In recent days the pound sterling has been confined to a tight range around the 1.3500 level, however last night we saw the GBP/USD pair move higher after a US dollar sell off, reaching a high of 1.3586 ending the day just below the 1.3600 level. Looking ahead tonight and all attentions turn to Prime Minister Theresa May's scheduled statement outlining her Brexit strategy. The GBP/USD pair is currently trading at 1.3580. We now expect support to hold on moves approaching 1.3530 while any upward push will likely meet resistance around 1.3610.

During a choppy session overnight investors have continued to digest the potential implications aligned to the US Federal Reserve’s interest rate decision on Wednesday. In what initially triggered a sharp move back into the US Dollar, the world’s reserve currency has since struggled to maintain its lofty height, losing 0.1 percent when measured against several of its key counterparts. While treasuries were mixed, base metals tumbled as did a raft assets across the emerging market space. Acknowledging that markets are now well attuned to the idea of higher rates out of the US come December, ongoing tensions in North Korea will continue to plague risk appetite as Donald Trump ordered new sanctions on Thursday against individuals, companies and banks doing business with the country. In what promises to be a busy end to the week a key note speech from ECB President Mario Draghi along with several key macro events will likely see attentions shift towards Europe this evening. This morning the greenback opens marginally lower whilst the euro has picked up 0.5 percent worth of gains.