The Australian dollar finished last week well supported through the US session, aided by broad-based weakness in the US dollar. This morning's market open has seen the Aussie start the week just 15 pips shy of last week’s high versus the Greenback, sitting currently at $US0.9375. Fed Governor elect Yellen’s comments regarding QE backing also gave risk assets a lift last week. Other major currency pairs have all opened largely in line with where they closed last week, with the exception of the Aussie. The local dollar opened slightly higher against all crosses except the Kiwi, against which it dropped to 1.1218 NZD as trade began. Softer US data to finish the week added to the Greenback's weakness; with Industrial Production and Manufacturing data missing market estimates, while European CPI hit its predicted level, sending the Euro close to $US1.35 this morning.
This currency trading week is skewered to the second half, aligning with the majority of top-tier economic news events to be released. Each economic region will have fundamental prints including US CPI data and FOMC Meeting Minutes for the Greenback and manufacturing and services PMI the Euro- major triggers for volatility across the last few months. Closer to home we have the Bank of Japan Monetary Policy Statement and those trading the Australian dollar will be focused on RBA’s Monetary Policy Meeting Minutes followed by HSBC Flash Manufacturing PMI later in the week.
Today’s trading day is void of economic data and likely to be a quieter day in terms of volatility and volume. Last Friday’s weaker US dollar themes are likely to be played out a little longer until the European session begins with Trade balance data out later tonight, followed by TIC Long-Term Purchses from the States early tomorrow morning.
Joel Murphy
www.pepperstone.com Joel Murphy is a currency analyst and market commentator for Forex Broker Pepperstone and he regularly features on Sky Business News Australia. He has worked in both retail and institutional Forex for last 8 years and completed a Bachelor of Commerce and a Bachelor of Arts from Monash University
