Daily Forex Commentary

28 September 2017 - Greenback showing signs of strength

By Sai Muthen

New Zealand Dollar:

The New Zealand Dollar remains relatively unchanged this morning, trading within a tight range slightly above the 0.72 level. Initially the Kiwi gained against the Greenback in overnight trading, reaching a high of 0.7238 and showing signs of post-election underperformance recovery. However, the positive headline gave way to a small sell-off and was subsequently forced lower as the RBNZ chose to keep rates on hold as widely expected. The official statement also held no demons with Acting Governor Grant Spencer reiterating the RBNZ’s continued accommodative stance. With little else on the domestic front to drive direction today, the Kiwi now turns to its counterparties GDP figures later this evening for momentum.

We expect a range of 0.7100 – 0.7300

Australian Dollar:

With the worlds reserve currency continuing its move to higher ground the Australian dollar has come under renewed pressure over the past 24 hours. Slumping to a low of 0.7836 during Wednesday’s session, optimism that Trumps Tax Plan will support growth and drive greater investment has spurred interest in the Greenback which again opens in a broadly stronger position this morning. Having to digest another tranche of key macro releases from the United States tonight, a speech by RBA Assist Governor Guy Debelle in London is likely to have only a limited impact. Opening lower the Australian dollar currently buys 78.50 US Cents.

We expect a range of 0.7750 – 0.7950

Great British Pound:

The Great British Pound exacerbated its’ losses this week, opening this morning at 1.3396. Despite surprising September CBI retail sales survey data revealing the fastest retail sales growth since September 2015, the Sterling continued its downward trajectory. The Cable has been highly susceptible to strengthening fortunes across the Atlantic with Janet Yellen’s hawkish speech continuing to dominant this week’s movements. The Sterling now turns to a potentially interesting speech from the Bank of England’s Governor Carney as Traders look for further clues as to the direction of monetary policy. Against the Aussie, the Sterling has remained relatively unchanged opening this morning at 1.7054.

We expect a range of 1.8500 – 1.8800 

Majors:

Market sentiment was positive towards the US Dollar overnight after US President Donald Trump proposed tax reforms were released. The plan included a cut to individual tax rates and lower company taxes from 35% to 20%. US data also supported the Greenback with US durable goods orders for August were on the stronger side of expectations bolstering expectations of an interest rate hike from the Fed. EUR/USD fell from 1.1795 to 1.1717, a one month low, USD/JPY was up 113.25 a 10-week high. Looking ahead German consumer prices and Eurozone confidence numbers are scheduled for release on today, with improvements expected in both reports. Traders see a likely bounce on the EUR/USD back towards 1.18.

Data releases:

AUD:

RBA Assist Gov Debelle Speaks

NZD:

Official Cash Rate; RBNZ Rate Statement

JPY:

BOJ Gov Kuroda Speaks

GBP:

BOE Gov Carney Speaks

EUR:

German GfK Consumer Climate; German Prelim CPI; Spanish Flash CPI

USD:

Final GDP; Unemployment Claims; FOMC Member Fischer Speaks

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