Daily Forex Commentary

12 September 2017 - Greenback recovers on risk appetite

By Vani Kolluri

New Zealand Dollar:    

 

The New Zealand dollar trend ticked higher as risk sentiment improved in overnight markets. Opening at 0.7245 against the US Dollar, the Kiwi reached intraday highs of 0.7295, unable to sustain its rally through the 0.73 barrier. With stronger movements in the US Dollar in offshore trading, the NZD/USD cross eventually settled lower, pairing gains for the day. The New Zealand dollar opens slightly higher this morning at 0.7260 with a lack of domestic data on the horizon.

 

We expect a range today of 0.7200 – 0.7300

 

Australian Dollar:

 

The Australian dollar edged lower through trade on Monday in what was a lacklustre session for macroeconomic drivers. With little to spark direction the AUD succumb to profit taking as renewed demand for risk sparked an increased push for the USD. Hurricane Irma’s downgrade to a Tropical Storm dampened expectations of a significant downturn to national GDP while North Korea did not perform further nuclear test at the weekend. The Aussie moved back through 0.8050 but found support having touched intraday lows at 0.8019 and opens this morning buying 0.8030 U. S cents. With resistance now forming as support at 0.8030 attentions turn to middle level U.S employment data ahead of key labour market data Thursday.

 

We expect a range today of 0.8000 – 0.8100

 

Great British Pound:

 

The Great British Pound struggled to mount any significant directional momentum through trade on Monday against the Greenback bouncing off lows of 1.3161 and highs of 1.3222. With little in the way of economic releases the pair remained in a relatively tight range as markets anxiously wait for the important House of Commons vote. As part of the Brexit process, MP’s will be voting on an EU repeal bill that will transfer powers across the UK, the UK government has warned of a chaotic Brexit if lawmakers do not back the bill. Tonight sees the release of UK CPI and PPI, CPI is expected to come in 2.8%, a softer than expected result could see investors sell GBP with a view that the Bank of England will put on hold any near-term rate increases.

 

We expect a range today of 1.8150 – 1.8250

 

Majors:

 

The greenback edged higher overnight in a broader USD recovery against most of its major rivals as risk appetite returns. The rally was driven by optimism among investors as Hurricane Irma damages would be far less than initially first reported. The S&P500 started the week by rising by more than 1% for the first time since August 12 on high trading volumes, to close just off its record high. Looking ahead today and the macroeconomic calendar is empty with no major releases in Europe and the US. The EUR/USD currency pair fell overnight to a weekly low of 1.1947. The EUR/USD pair is currently trading at 1.1957. We now expect support to hold on moves approaching 1.1900 while any upward push will likely meet resistance around 1.2030.

 

Data releases:

AUD:

 NAB Business Confidence

NZD:

 No data

JPY:

 Core Machinery Orders m/m, Prelim Machine Tool Orders y/y

GBP:

CPI y/y

EUR:

Italian Quarterly Unemployment Rate

USD:

NFIB Small Business Index, JOLTS Job Openings

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