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Morning Users;
the AUD held onto its recent gains last week reaching its highest point in eight months against the USD. A number of factors conspired to push the AUD higher up towards 0.7600 USD before settling in arpound 0.7540 USD to start this week. Strengthening commodity prices have provided a base for the AUD to consolidate around in recent weeks whilst the Chinese Central Bank's decision to fix its CNY rate higher against the USD also benefited the AUD.
The stronger CNY could be seen as positive for commodity markets and the likelihood that an increase in demand from China could be emerging. Coupled with the European Central Bank's stimulus late last week, this action in China has seen a more positive "risk-on" approach begin to be adopted across global markets benefiting the AUD.
That being said it is likely to be another volatile and pivotal week for the AUD with numerous local and global data, speeches and announcements taking place. The meeting minutes from the March RBA meeting are scheduled for release on Tuesday and it will be interesting to note any direct references to the AUD strength. There has been a lack of jaw-boning by the RBA in the last couple of weeks about the strength of the AUD so the official minutes will be pored over closely. It would not be a surprise this week to see the emergence of more "personal opinions" from RBA board members in regard to the AUD. The notoriously fickle Australian employment change figures will also be released on Thursday alongside unemployment data.
Across the Tasman in New Zealand the NZD also benefited from the late surge in commodity based currencies against the greenback. This was shortly after the RBNZ had surprised many by taking the plunge to cut interest rates at last week's meeting. RBNZ Governor Wheeler is scheduled to speak on Tuesday and it will no doubt be interesting following the local move and also through the prism of ECB and Chinese Central Bank action.
The big global event of the week will, however, be the US Federal Reserve FOMC meeting and its accompanying statment. Whilst we are not anticipating an interest rate increase at this week's meeting the accompanying economic projections and statement wording will be eagerly anticipated and scrutinized from every available angle. An interest rate rise at the June meeting of the FOMC is now an even monye bet according to a Bloomberg poll. Housing data, retail salesbusiness inventories and CPI figures will all be released in the early part of the week ahead of the FOMC meeting with unemployment data closely following.
The ECB took many by surprise with the size and scope of its stimulatory activity at last weeks meeting with interest rate cuts and a bigger than expected increase to its asset purchase facility the key planks. After an initial response to these measures that saw the EUR fall against the USD and appear to have their desired effect this quickly changed. ECB President Draghi proceeded to state that the ECB did not expect that it will need to cut interest rates further. The intial desired decline in the EUR then quickly turned as the EUR rose sharply against the greenback on the premise that negative interest rates may have in fact bottomed. Draghi has however claimed that the ECB has other methods available to stimulate the beleagured region's economy. Time will tell.
The Bank of England (Thursday) and Bank of Japan (Tuesday) will also be meeting this week. Key British data including average earnings and unemployment are due on Wednesday as is the British Government's Budget. Talk of the possible exit by the UK from the EU continues to dominate as well.
Regards All Users.
the AUD held onto its recent gains last week reaching its highest point in eight months against the USD. A number of factors conspired to push the AUD higher up towards 0.7600 USD before settling in arpound 0.7540 USD to start this week. Strengthening commodity prices have provided a base for the AUD to consolidate around in recent weeks whilst the Chinese Central Bank's decision to fix its CNY rate higher against the USD also benefited the AUD.
The stronger CNY could be seen as positive for commodity markets and the likelihood that an increase in demand from China could be emerging. Coupled with the European Central Bank's stimulus late last week, this action in China has seen a more positive "risk-on" approach begin to be adopted across global markets benefiting the AUD.
That being said it is likely to be another volatile and pivotal week for the AUD with numerous local and global data, speeches and announcements taking place. The meeting minutes from the March RBA meeting are scheduled for release on Tuesday and it will be interesting to note any direct references to the AUD strength. There has been a lack of jaw-boning by the RBA in the last couple of weeks about the strength of the AUD so the official minutes will be pored over closely. It would not be a surprise this week to see the emergence of more "personal opinions" from RBA board members in regard to the AUD. The notoriously fickle Australian employment change figures will also be released on Thursday alongside unemployment data.
Across the Tasman in New Zealand the NZD also benefited from the late surge in commodity based currencies against the greenback. This was shortly after the RBNZ had surprised many by taking the plunge to cut interest rates at last week's meeting. RBNZ Governor Wheeler is scheduled to speak on Tuesday and it will no doubt be interesting following the local move and also through the prism of ECB and Chinese Central Bank action.
The big global event of the week will, however, be the US Federal Reserve FOMC meeting and its accompanying statment. Whilst we are not anticipating an interest rate increase at this week's meeting the accompanying economic projections and statement wording will be eagerly anticipated and scrutinized from every available angle. An interest rate rise at the June meeting of the FOMC is now an even monye bet according to a Bloomberg poll. Housing data, retail salesbusiness inventories and CPI figures will all be released in the early part of the week ahead of the FOMC meeting with unemployment data closely following.
The ECB took many by surprise with the size and scope of its stimulatory activity at last weeks meeting with interest rate cuts and a bigger than expected increase to its asset purchase facility the key planks. After an initial response to these measures that saw the EUR fall against the USD and appear to have their desired effect this quickly changed. ECB President Draghi proceeded to state that the ECB did not expect that it will need to cut interest rates further. The intial desired decline in the EUR then quickly turned as the EUR rose sharply against the greenback on the premise that negative interest rates may have in fact bottomed. Draghi has however claimed that the ECB has other methods available to stimulate the beleagured region's economy. Time will tell.
The Bank of England (Thursday) and Bank of Japan (Tuesday) will also be meeting this week. Key British data including average earnings and unemployment are due on Wednesday as is the British Government's Budget. Talk of the possible exit by the UK from the EU continues to dominate as well.
Regards All Users.
