Expected Range 1.2980 to 1.3070
With a very quiet start to the week in terms of data releases the US Dollar was able to continue its gains off the back of Friday’s payroll figures. Attention yesterday turned to Fed members Bullard and Kashkari who both commented on the short-term outlook for potential rate hikes. Both individuals are notoriously dovish and both stated that the likelihood of a hike in the near future is very unlikely. It seems markets have priced in a dovish Fed for the back end of 2017 with these statements doing little to demotivate the USD. This highlights the opinion that a lack of rate hikes this year may not be a great risk to the Dollar value. Today’s calendar will only have minor releases, with the headline figure coming in with JOLTS Job Openings. Following Friday’s payroll figures, any positive news here could allow for the Dollar to continue its rally. With little of note today to motivate investors, we could see the USD continue gains across the board following Friday’s figures.
The only release of note yesterday in the UK came in the form of Halifax HPI m/m which came in above forecast at 0.4%. This did little to motivate movement as sterling remains under pressure. With no data to discuss on the card today the pound could continue to struggle as the discussion turns back to Brexit which continues to add uncertainty for the pound. Many EU diplomats are calling for the UK to re-join the European Economic Area from outside of the EU. This progress will leave markets anticipating a fairly smooth exit from the EU for British businesses however many commentators are stating that this process could take as long as 3 years, which in the short/medium term could lead to further uncertainty. GBP/USD is currently trading at 1.3039.
Expected Range 1.1000 to 1.1080
The Euro remains fragile following Friday’s payroll figures from the US. The only figure of interest released yesterday came in the form of German Industrial Production m/m which fell dramatically from 1.2% to -1.2%. With no headline figures due to be released today, we will likely see the Euro fall further under pressure as the USD continues to rally off the back of positive sentiment. GBP/EUR is currently trading at 1.1043.
Expected Range 1.6400 to 1.6490
Overnight saw the release of the NAB Business Confidence which came in at a record high allowing the AUD to strengthen. The Australian economy may be showing signs of recovery and will likely reaffirm the position of a cautious approach to growth taken by the RBA. With RBA assistant Governor, Kent, speaking tonight we may see an indication as to the central bank's plans moving forward. With uncertainty continuing on a global scale, we may see the Aussie Dollar rally off the back of this positive data. GBP/AUD is currently trading at 1.6447.
New Zealand Dollar
Expected Range 1.7680 to 1.7760
We have very little from New Zealand and with little else on the cards today markets will patiently await Wednesday nights Rate decision and RBNZ statement. The central bank will likely hold rates at 1.75% but the announcement has the potential to motivate markets. GBP/NZD is currently trading at 1.7725.