Daily Forex Commentary

23 December 2016 - AUD trades below 72 US Cents amid light flows

By Michael Judge

New Zealand Dollar:

    

Trading between a low of 0.6887 and a high of 0.6925 when valued against its US Counterpart, the New Zealand dollar picked up some marginal gains versus the world’s reserve currency overnight as data prints from the world’s biggest economy painted a mixed economic picture. Whilst demand for the Greenback did soften, trading conditions over the past 24 hours have remained light with investors instead preferring to sit on the sidelines given the lack broader participation. Overshadowing a positive GDP print locally yesterday which showed New Zealand’s economy expanded by 1.1 percent during the third quarter of this year, flows through to the end of 2017 remain set to be dominated by the performance of the Greenback. Stronger the Kiwi currently buys 69.04 US Cents.

We expect a range today of 0.6880 – 0.6930

Australian Dollar:

The Australian dollar has once again struggled to keep its heads above water when valued against its US Counterpart over the past 24 hours. Briefly dipping below the critical 72 US Cents mark, a lower Greenback was not enough to stop the Aussies slide on Thursday as asset classes deemed riskier in nature tracked lower across the board. Attributing the majority of the declines to an iron ore price which lost a staggering 3.8 percent the Australian dollar opens in a seemingly vulnerable position this morning at a rate of 0.7209. In what’s now expected to be a period of low liquidity as markets wind down for Christmas there remains one more set of macro prints from the United States evening.

We expect a range today of 0.7180 – 0.7240

Great British Pound:

Testing fresh one-month lows when valued against its US Counterpart the Great British Pound has come under renewed selling pressure overnight, pressure mainly applied from a raft of US Data prints. Having traded as high as 1.2378 earlier in the piece, the Sterling has since unravelled with domestic flows offering no support to the Sterling. With the holiday season now on the markets door step Current Account numbers this evening offer investors one last opportunity to trade a domestic risk event. Weaker versus the Greenback at a rate of 1.2288 the Sterling is lower also versus both the Aussie (1.7045) and the Kiwi (1.7798).

We expect a range today of 1.7740 - 1.7860

Majors:

US Stocks retreated as did treasuries overnight amid a flurry of US data prints which showed patches of mixed economic performance. Painting however an overall positive outlook, data on durable goods orders showed increased business activity whilst a final GDP estimate surpassed expectation. Having posted a series of multi-year highs in the aftermath of Donald Trump’s election success or more recently following hints from the US Federal Reserve that higher rates sit just around the corner, there has been some signs of profit taking over the past 24 hours amid concerns the Greenbacks impressive upward trajectory may start to flat-line. In light trading ahead of Christmas, the dollar index, measuring the greenback against a group of six major currencies, opens 0.3 percent lower.

Data releases

AUD:

No data today.

NZD: No data today.

JPY:

 Bank Holiday.

GBP:

Current Account, Final GDP q/q.

EUR:

No data today.  

USD:

New Home Sales, Revised UoM Consumer Sentiment

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