Volumes light as traders look towards the New Year

Australian Dollar

Expected Range 0.7260 – 0.7310

Failing once again to capitalise on moves up above the 73 US Cents handle the Australian dollar struggled to stretch its legs when valued against its US Counterpart on Wednesday. Further indicating that markets are well and truly winding down for the year, trading ranges have remained comfortably in tact during the overnight session as the oil lead buying spree earlier in the week failed to leave a lasting in print on broader values. Opening steady this morning at a rate 0.7285, investors are expected to hit the ground running during the first week of 2016 in anticipation of a handful of macro releases from China over the weekend.

New Zealand Dollar

Expected Range 0.6810 – 0.6870

In light of a docile global economic backdrop the New Zealand dollar has drifted between a low of 0.6830 and a high of 0.6872 when valued against its US Counterpart overnight. Despite comments from Christine Lagarde, the Managing Director of the International Monetary Fund who predicts global economic growth in 2016 will be disappointing given rising borrowing costs in the United States amid a slowdown in China, overall the Kiwi’s performance has been extremely steady overnight. Ending an impressive final quarter, the New Zealand dollar remains on track to be one of the best performing G10 currencies during the final three months of 2015, notching a positive correction following nine month’s worth of earlier falls. The Kiwi is solid this morning as it currently buys 68.34 US Cents.

Great British Pound

Expected Range 2.0310 – 2.0410

Struggling for inspiration over the past 24 hours the Great British Pound has failed to re-gain any significant ground when valued against its US Counterpart. Whilst successfully keeping its head up above the 1.4800 mark for much of yesterday’s session, the approaching three month window promises to be an interesting period for the Sterling with heightened levels of volatility expected as the Bank of England begin to signal a shift in their underlying monetary policy stance. With many market participants foreseeing near-term weakness ahead of medium-term strength, interest rate adjustments will be necessary to keep expectation intact. Stronger across the board this morning, gains are noted versus the Greenback (1.4827), the Aussie (2.0357) and the Kiwi (2.1690).  

Majors

Expected Range N/A

Shares on Wall Street fell on Wednesday as Brent Crude Oil erased all of its earlier gains, sliding towards fresh 11 year highs. In light of growing global supply and lower demand one of the biggest stories over 2015 has been oils capitulation, as has the 23 percent decline across the broader energy sector, a move not assisted by the well documented commodities rout. In economic news overnight US Pending Home Sales data fell in November for the third time in four months, a sign the US housing market could be cooling. Looking ahead to the New Year one the biggest question marks across broader forex markets remains whether the world’s largest economy is capable of performing strongly enough to ensure the US Federal Reserve’s four predicted interest rate hikes come to fruition. Whilst market participants are only pricing in two hikes, this key mismatch leaves the Greenback vulnerable should a string of hikes not eventuate. Meanwhile this morning the US dollar opens steady against the euro (1.0919) whilst lower against the Yen (120.596)

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