Aussie tightly rangebound as China posts mixed result.

Key Movers

The New Zealand Dollar has steadied over the past twenty-four hours after initially opening the week at 0.6768 against the US Dollar. Despite the NZ services sector reading for June being lower at 52.8, it still showed a positive measure of expansion and has not shown a level of contraction since 2010.

Little movements were seen to the end of domestic play before seeing an overnight high during the European session of 0.6790 and up 0.3% for the day.



Investors are focused this morning on the release of the latest New Zealand CPI reading whereby markets expect to see an annualised reading of 1.6% and 0.5% for the quarter. With inflation continuing to struggle below the RBNZ targets of 2%, any further weakness would hamper any expectations of future interest rate increases which is currently priced in at one hike by 2020.

The New Zealand dollar opening this morning at 0.6775


The Pound Sterling edged higher through yesterday’s Asian and early European session just shy of the 1.33 handle against the Greenback however, the move was short-lived and the Pound slid back towards lows of 1.3218. On the release front, House Prices slipped 0.1% in July, according to the Rightmove measure. The annual pace of house price growth slid to 1.4% in July, from 1.7% in June.




Brexit front, the government has narrowly avoided a defeat on its Customs Bill after May “caved in” to pressure from Tory Brexiteers to change the wording of her Chequers plan for leaving the European Union. The Government announced earlier that it accepted all four reforms to the Bill sparking fury among pro-European Conservatives. Mrs May insisted the amendments do not change the blueprint agreed which relates to trade across UK-EU borders after Brexit and are “consistent” with the White paper. May faces further danger today, with pro-EU Tories tabling amendments to the Trade Bill, which returns to the Commons.




Looking ahead, The governor of the Bank of England testifies in Parliament and may face a few tough questions about postponing the rate hike and the impact of Brexit on the economy. There have been increasing chances of a rate hike in August, but markets haven’t fully prices this in so any hints will likely rock the pound. We also have a few jobs report piece out of the UK. Average Hourly Earnings, arguably the most essential data points, carry expectations for another month at 2.5% in May, which is below the inflation rate. Any change in wages will move Pound. The unemployment rate for May is estimated to have remained steady at 4.2% and the Claimant Count Change is expected to increase by 2.3K in June after a drop of 7.7K in May.


On the technical side, we see immediate support at 1.3220 followed by 1.3100. On the upside, first line of resistance at 1.3280 and 1.3360.


Despite an uptick in retail sales and improvements in manufacturing indices the US dollar fell through trade on Monday edging marginally lower as investors capitalized on recent gains and opted to take profit ahead of key Fed testimony. New Fed President Jerome Powell is set to testify for the first time before the U.S Senate Banking Committee today and the House of Representatives Financial Services Committee Wednesday. While it is expected he will maintain a similar tone to that proffered in recent monetary policy statements, reiterating the Fed’s support of additional rate tightening. However recent trade hostilities have raised questions as to whether the FOMC will need to alter its path of monetary policy adjustment and investors will be keenly attuned to any note or nod to tariff tension and its impact on Domestic US growth.


Having dipped two tenths of a percent against a basket of major counterparts the Dollar closed lower for a second consecutive session, however while risk appetite remains largely absent and the FOMC continues to be the only major central bank is a definitive tightening cycle it is unlikely we will see a significant downward correction in the short term.



Attentions now turn to Powell’s testimony while trade tensions continue to direct the eb and flow of broader risk demand, influencing at the very least short term ranges.


EURUSD was able to break above 1.17 closing 0.20% up versus the USD at around 1.1711. Again, the Euro traded within a thin range between 1.1675 and 1.1725 on a low volume session ahead of Tonight’s testimony to the Senate from FED Chairman Jerome Powell.

From the data front we have Italian CPI and Industrial Orders later Tonight, a rather light agenda. From a technical perspective, support for the EURUSD sits at 1.16 while short-term resistance is seen around 1.1735, which is the 55-day moving average.


Good session for the loonie, taking advantage of broad, although light, USD weakness. USDCAD closed below 1.3150, with the CAD strengthening around 0.20% to close at 1.3136 versus the USD.

The CAD was able to outperform the greenback despite declining WTI crude prices, on the other hand the USD couldn’t outperform other major currencies despite a spike in US yields.

The main catalyst of the loonie strength was the Existing Home sales data, which came much stronger than expected (4.1% in June versus 1.7% expected). The CAD rallied more than 0.30% on the news, with USDCAD dropping as far as 1.3113, where good support for USD was found. On the upside, short-term resistance is still sitting at 1.32