By Kymberly Martin
In relatively quiet post-payrolls trading, most currencies maintained reasonably contained ranges.
‘Commodity-linked’ currencies, led by the AUD, have outperformed since the start of the week. The JPY has underperformed its peers.
In a familiar pattern of bedding down after the previous week’s payrolls excitement, the USD has traded a tight range with a very modest upward bias. It now trades at 96.40, just short of the 200-day moving average at 96.60.
The JPY was on a steady descent overnight. Fairly calm markets limited demand for the ‘safe haven’ currency. Our global risk appetite index remains at a reasonably solid 63%. The USD/JPY climbed from 102.00 to 102.50.
The AUD, CAD and NOK all traded higher overnight, helped by a better tone in commodity markets.
The CRB broad global commodity index gained around 0.8% from Friday’s close. The WTI oil price has pushed up 3.7%.
The AUD/USD now trades at 0.7660, from early evening lows around 0.7610. It found resistance overnight at the July highs above 0.7670.
Today the NAB AU business survey is due. Recall the June survey showed improvement despite being conducted ahead of the Australian federal election and amidst the uncertainty of the ‘Brexit’ vote.
The NZD/USD trades at ta similar level to yesterday. It took a dip yesterday afternoon around the time of the publication of a note suggesting the RBNZ may need to deliver further OCR cuts than are currently priced.
However, it soon recovered from lows below 0.7090 to trade at 0.7140 this morning. We continue to believe that views regarding RBNZ activity can have only limited impact on the NZD/USD.
The more enduring influences will be the outlook for US Fed activity, global risk appetite and the relative growth differential between NZ and its key peers.
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BNZ Markets research is available here.