US dollar stretches its legs

Australian Dollar:

The Australian dollar has been sold heavily during overnight trade with US investors returning from their extended long-weekend. With commodity prices falling across the board amid better than expected economic data from the United States, bets have increased overnight that the US Federal Reserve will be raising interest rates sooner rather than later. Falling from an opening level of 0.7821 the Australian dollar bottomed out a rate of 0.7727 when valued against its US Counterpart opening this morning nearing its low at 0.7730. On the horizon today, construction figures followed by a speech from Deputy RBA Governor Philip Lowe will be closely watched.   

• We expect a range today of 0.7680 – 0.7780

New Zealand Dollar:

Lower commodity prices, persistent worries that Greece will fail to meet its repayment deadline and a notably stronger US dollar have all taken its toll on the Kiwi overnight. Dropping by close to one percent to a low of 0.7220 when valued against its US Counterpart positive trade balance numbers earlier in the day were all but a distant memory by the time a raft of positive economic indicators started to the flow from the world’s largest economy. Opening this morning lower currently buying 72.26 US Cents, it’s expected that interim support should hold above the 72 US cents level today ahead of an additional test this evening.   

• We expect a range today of 0.7200 – 0.7280

Great British Pound:

The Great British Pound has struggled to keep pace with a notably stronger Greenback overnight as a string of impressive data points from the United States triggered a bout of US dollar buying. In a trend which is likely to continue in the absence of any rate hikes from the Bank of England, the monetary policy settings both the UK and US will be key in determining medium-term price points. Opening weaker against the Greenback this morning at rate of 1.5383 the Sterling is stronger against both the Aussie (1.9901) and the Kiwi (2.1277).

• We expect a range today of 1.9840 – 1.9980

Majors:

The US dollar has strengthened by more than 1 percent against other major currencies overnight, climbing to an almost 8 year high when valued against the Japanese Yen. Whilst the 18-nation euro also dropped below the 1.09 mark for the first time in a month over concerns that Greece will fail to meet its obligations to the International Monetary Fund early next month. Acting as a catalyst behind last night’s US dollar moves improved capital goods orders, a positive consumer confidence read and a gauge of home purchases and prices also beat estimate. Improving perceptions which surround the timing of the US Fed’s first interest rate hike, a continuation of last night’s trends have bought expectations forward to September. On the outlook today, investors will be looking towards a period a consolidation ahead of a preliminary GDP print in the United States on Friday

Data releases

• AUD: RBA Deputy Governor Speaks, Construction work done q/q
• NZD: No data today
• JPY: Monetary Policy Meeting minutes
• GBP: No data today
• EUR: No data today
• USD: No data today