Commodity prices continued lower overnight, with Natural Gas and Oil leading the way. Weaker US Core Durable Goods Orders were shrugged off, with a broad sense of risk aversion taking centre-stage. Equities also suffered, in what seems to be profit taking ahead of tomorrow mornings all-important US FOMC statement. The AUDUSD seems to have taken the brunt of the pre-FOMC sell-off, with continued AUDNZD selling, eyeing fresh lows below 1.0600. Today we will see AU quarterly CPI numbers released, however barring a big miss (expectation is 0.7%), we wouldn’t expect any prolonged market moves ahead of the FOMC.
We expect a range today of 0.7110 – 0.7210
New Zealand Dollar
In a relatively mixed night NZDUSD remained fairly buoyant, briefly trading back through 0.6800 on the upside, before drifting lower to remain largely unchanged on the day. This price action follows the weaker NZ Trade Balance numbers yesterday, coming in at -1.22B vs the expected -825M. Weaker US Core durable goods numbers were essentially shrugged off overnight, with an overall tone of risk aversion taking the front seat ahead of the FOMC meeting tomorrow morning. Despite lower equity and commodity prices overnight, the NZDUSD seems to have held its ground due to NZDAUD buying, with the pair again eyeing fresh 4 month highs. Tomorrow sees the Reserve Bank of New Zealand rate decision, which is expected to be unchanged. That said, with other central banks around the globe easing, the pressure is on and we will see some volatility around decision time.
We expect a range today of 0.6730 to 0.6790
Great British Pound
The Great British Pound was sold last night, with weaker than expected US Core Durable Goods Orders largely ignored (-0.4% vs 0.0% expected) and the all-important UK Preliminary GDP number the focus. The quarterly GDP figure came in slightly lower than forecast, at 0.5% vs the expected 0.6%. Expect a soft, albeit muted tone in Cable ahead of tomorrow mornings US FOMC statement, with strong breakouts and trendy price-action unlikely until the market has more information.
We expect a range today of 2.1100 – 2.1350
The Euro (1.1039) opens little-changed this morning against its US counterpart and continues to trade on broader sentiment. With a series of German fundamentals set for release later in the week and export growth to China slowing there remain some concerns for the unit. Overall, traders remain focussed on the FOMC interest rate announcement later in the week. Adding to the USD woes and casting more doubt that the FED will raise rates this year was a fall in the Core Durable Goods Orders and the CB Consumer Index. Orders of goods slipped to negative 0.4% and the August number was also revised down. USDJPY some see some movement today with the release this morning of Japanese Retail Sales which the market is forecasting at coming in around the 0.4% level year on year.
AUD: CPI Q/Q
NZD: No data today
EUR: Gfk German Consumer Climate
JPY: Retail Sales
USD: Goods Trade Balance