Daily Currency Update
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North Korean Tensions weigh on otherwise buoyant Greenback
By MATT RICHARDSON
Australian Dollar
AUD / USD
Expected Range
0.7730 – 0.7830
The Australian Dollar opens this morning at 0.7776, unable to keep up the pace with a stronger Greenback. The local unit felt the pressure for most of last week as weakness in local Australian data dragged the pair lower. Building approvals slowed as well as the AIG manufacturing and services sectors. Retail Sales also reported a fall and with the RBA concerned over the outlook for household spending the future on a near interest rate rise has lowered. When valued against the worlds reserve currency the Aussie touched a three-month low of 0.7733 and a high of 0.7798. Aiding Greenback strength was Friday’s U.S jobs report for the month of September, the unemployment rate fell and the average hourly earnings rate rose driving the expectations of a Fed rate hike. The AUD/USD is now facing resistance-turned-support at around 0.7700. A break through this trend line could bring the price to the next support level at 0.7535. Resistance is sitting at 0.7800.
New Zealand Dollar
NZD / USD
Expected Range
0.6980 – 0.7130
Great British Pound
GBP / AUD
Expected Range
1.6650 – 1.7080
Majors
USD, EUR, JPY
Expected Range
N/A
The U.S dollar enjoyed mixed fortunes through trade on Friday pushing its longest weekly winning streak in nearly 12 months. Despite a disappointing non-farm payroll (NFP) print the Greenback found support following stronger than expected wage growth data and jumped to touch two month highs against both the Yen and Euro. Investors largely shrugged aside the soft NFP read as Hurricanes Irma and Harvey leave thousands of Americans temporarily displaced and unemployed and instead focussed on the uptick in average hourly earnings. The indicator tracking wage growth encouraged those betting on a December rate hike as higher wages typically bolsters appetite for consumer spending and increases price pressures. Wage growth and Inflation have been key concerns for the FOMC and perhaps the most significant road block ahead of planned monetary policy amendments. Having forced the Euro through 1.17 and pushing through 113 JPY the US dollar then shifted lower as fears of conflict between the US and North Korea continue to escalate. Suggestions North Korea is preparing to test a long-range missile heightened concerns leading into the weekend that some form of military intervention was imminent. Opening this morning marginally lower attentions turn to key Retail sales and inflation data Friday for direction amid geo-political turmoil.