OzForex Daily Forex Commentary

Daily Forex Commentary - Friday, 10 Sep 2010

Thu, 09 Sep 2010 21:48:52:183 GMT

:: Australian Dollar: Australia’s Unemployment Rate (and general state of the economy) continues to be the envy of the western world as indicated by yesterday’s release by the Australian Bureau of Statistics of official employment data for August. The figure indicated a drop in the unemployment rate by 0.2%, with the number for August coming in at 5.1% compared with the previous months reading of 5.3%. Both the full time and part time component of the release indicated a strong surge in the jobs and puts a strong case forward for a potential interest rate hike by the RBA before year end. On release of the data the local unit surged from 0.9180 smashing through the 92 cents level onto an eventual local high of 0.9238. During the offshore session the momentum continued with the Aussie briefly touching a four-month peak at 0.9276 after stronger than expected economic data releases in the United States. The unit opens at 0.9228 this morning.

- We expect a range today in the AUD/USD rate of 0.9200 to 0.9280

:: Great Britain Pound: Pound Sterling opens lower today against the greenback at 1.5426 after the Bank of England left its benchmark interest rate unchanged at a record low of 0.5 per cent and its quantitative easing program at GBP200bio. Sterling moved to an overnight low of 1.5375 after the UK’s trade deficit widened to GBP8.7bio in July compared to GBP7.5bio in June. Exports slipped to GBP22.3 billion. Meanwhile, the pound continues to be outperformed by both the Australian Dollar (1.6700) and the New Zealand Dollar (2.1280).

- We expect a range today in the GBP/AUD rate of 1.6660 to 1.6720

:: New Zealand Dollar: Yesterday’s release of the NZ Manufacturing Sales Index (a gauge of total value of sales in manufacturing) was Kiwi positive during the Asian yesterday and saw the dollar continue its recent upward trend against the Greenback. The report came in at 3.1% quarter on quarter, up 1.7% from its previous reading of 1.4%, resulting in the NZ Dollar hitting a local high of 0.7256. During the European and US sessions, the momentum continued with New Zealand Dollar hitting a high of 0.7287. Next Tuesday’s all important Retail Sales number and Thursdays Reserve Bank of New Zealand’s interest rate decision hold the key to NZ Dollar direction in the next week with positive outcomes potentially pushing NZDUSD through the crucial 0.73 cents level.

- We expect a range today in the NZD/USD rate of 0.7210 to 0.7290

:: Majors: Stronger-than-expected U.S. economic data could not prevent the greenback slipping towards 15-year lows against the Japanese Yen yesterday (83.48). The U.S. trade deficit narrowed 14 per cent in July to US$42.8 billion whilst weekly jobless claims fell by 27,000 to 451,000. The unemployment insurance claims data was the lowest in two months, easing concerns in the market that the world’s largest economy will slip into a double-dip recession. Meanwhile, risk appetite towards the Euro was tempered somewhat as news emerged that Germany’s biggest bank, Deutsche Bank AG, is looking at increasing its stake in Deutsche Postbank to help it meet rising regulatory capital requirements. The 16-nation currency opens lower today at 1.2690.

:: Data Releases:

AUD: No data today
CAD: Employment, August
EUR: French Industrial Production, July
GBP: Producer Prices, August
JPY: GDP, Q2
NZD: Terms of Trade, Q2
USD: No data today

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Daily Forex Commentary - Thursday, 09 Sep 2010

Wed, 08 Sep 2010 22:01:08:527 GMT

:: Australian Dollar: The Aussie dollar held firm in Asia yesterday despite a negative lead from offshore markets during the previous sessions trading between 0.9100 and 0.9130 for the majority of the day. Reinforcing the strength of the Australian economy was the release of Home Loan data which showed a healthy 1.7% increase in the value of loans during the month of July, above forecasts for a 1.1% rise. During the offshore session overnight the AUD/USD rallied back towards the 92 cent mark with demand coming from a recovery in equity markets and risk sentiment. The local unit opens this morning at 0.9185 ahead of the much anticipated employment report with the official headline rate expected to decline from 5.3% to 5.2%, underpinning the phenomenal performance of the domestic economy. Should the numbers come in above expectations then one would expect the AUD/USD to retest and possibly break through the stubborn 0.9220 resistance level.

- We expect a range today in the AUD/USD rate of 0.9135 to 0.9235

:: Great Britain Pound: The Pound Sterling popped higher in early London exchange yesterday rallying from 1.5380 to an eventual high around 1.5525 against the Greenback. Industrial Production data out of the UK rebounded strongly from the -0.5% June reading posting a solid +0.3% result in July boosting confidence in the economic recovery. This morning sees the GBP exchanging at 1.5475 and 1.6840 against the U.S and Australian dollars respectively with more volatility on the GBP/AUD cross expected in Asia today with the release of local employment figures. This evenings Bank of England meeting will be keenly anticipated with rates expected to remain on hold but the accompanying rhetoric, particularly surrounding the Asset Purchase Target plan, to have an impact on the currency.

- We expect a range today in the GBP/AUD rate of 1.6750 to 1.6900

:: New Zealand Dollar: The Kiwi bounced back from an Asian sell off towards 0.7150 yesterday to enter offshore exchange threatening to break above 72 cents. Resistance eventually gave way with the NZD/USD opening this morning near the overnight highs at 0.7230. Improved risk appetite seemed to be the key behind the move with the release of a slightly better than expected U.S Federal Reserve Beige book report that highlighted a slightly more resilient economy than thought. This morning sees the release of the June quarter economic survey of Manufacturing with all eyes on the key 0.7250 level where sellers appear to be lining up.

- We expect a range today in the NZD/USD rate of 0.7185 to 0.7275

:: Majors: Despite continued negative sentiment surrounding European sovereign debt and a lower than expected reading for German Industrial Production EUR/USD bounced back from its early offshore lows near 1.2650 to open this morning at 1.2720. The release of the U.S Federal Reserve Beige book which documents anecdotal evidence from the 12 district banking regions indicated that two of them pointed to “positive developments or net improvements” with five signalling economic growth at a “moderate pace”. Whilst the report did not signal a strong economy it was somewhat of a confidence boost for the markets providing a small boost to equities and risk appetite in general. After making new lows once again in Asia yesterday USD/JPY bounced back from 83.40 to post a high near the 84 level following the report and opens this morning at 83.90. In other news the Bank of Canada raised interest rates for the third consecutive month by 0.25% to 1% overnight sending USD/CAD down from 1.0500 to a low 1.0345 in quick fashion. It does however appear as though rates will remain on hold for the foreseeable future with the accompanying statement saying that “Any further reduction in monetary stimulus would need to be carefully considered in light of the unusual uncertainty surrounding the outlook.”

:: Data Releases:

AUD: Aug Employment Data
NZD: Q2 Manufacturing Activity
USD: Jul Trade Balance & Weekly Jobless Claims
GBP: Jul Trade Balance & BoE Meeting
EUR: German Aug CPI Revision & ECM Monthly Bulletin
JPY: Q2 Capital Spending & Aug Consumer Confidence

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Daily Forex Commentary - Wednesday, 08 Sep 2010

Tue, 07 Sep 2010 21:59:07:583 GMT

:: Australian Dollar: It was a volatile intraday session for the Aussie in Asia yesterday as investors eyed resolution to the political stalemate in addition to the Australian and Japanese central bank meetings. After opening near its highs at 0.9170 the AUD/USD traded between 0.9135 and 0.9170 until the conclusion of the BoJ meeting with a dovish assessment from the central bank increasing risk aversion dragging the local unit down slightly from 0.9170 to 0.9140 . The RBA statement carried little in the way of new information but on the whole was upbeat about the local economy however this was offset by investor’s negative reaction to a Labor victory with the government almost immediately pledging its allegiance to the controversial mining tax. Offshore investors continued to take risk off the table with demand for the Greenback and Yen intensifying as North American equity markets fell and the Aussie dollar opens this morning near its overnight lows around the 91 cent level.

- We expect a range today in the AUD/USD rate of 0.9060 to 0.9150

:: Great Britain Pound: The Pound Sterling traded in a narrow range during yesterday’s local session forming intraday support at 1.5350 against the Greenback. This level gave way in European trade however following a disappointing German manufacturing report which cast doubts over growth prospects for Europe’s largest economy. The negative sentiment boosted demand for the U.S dollar which saw GBP/USD briefly dip below the 1.5300 handle. A 2.8% increase in consumer spending as measured by the BRC Retail Sales Monitor added some support however and the GBP recovered somewhat to open this morning at 1.5355 USD. The GBP/AUD cross rate also found some much needed support around 1.6750 overnight thanks mainly to a slightly lower Aussie dollar opening this morning at 1.6870.

- We expect a range today in the GBP/AUD rate of 1.6800 to 1.6920

:: New Zealand Dollar: With no N.Z economic data for direction the Kiwi washed around the 72 cent handle against the Greenback in Asia yesterday with any attempts at a rally capped by negative risk sentiment. A dovish outlook by the Bank of Japan coupled with some concerns around Germany overnight sees the NZD/USD open marginally lower at 0.7180 this morning ahead of today’s N.Z Q2 Manufacturing Activity report. The AUD/NZD cross rate bounced back from a dip to 1.2610 to open at 1.2665 with resistance above 1.2700 likely to cap any advances in Asia today.

- We expect a range today in the NZD/USD rate of 0.7150 to 0.7225

:: Majors: As expected the Bank of Japan kept rates on hold at 0.1% yesterday and in a dovish view for the outlook said “Against the backdrop of increased uncertainty about the future, especially for the U.S. economy, and associated instability in the foreign exchange and stock markets, attention should be paid to downside risks to Japan’s economy”. The news saw an increase in risk aversion and the Yen actually strengthen more as USD/JPY fell from 84.10 to an eventual offshore low around 83.50. The Euro also declined overnight, falling below 1.2800 against the Greenback in early offshore exchange following a woeful report on German manufacturing report. Factory orders for Europe’s largest economy were expected to have slowed from 3.6% in June to around 0.5% in July however the -2.2% result was well below economist forecasts. It is a worrying sign given Germany’s somewhat resilient economy that has been a shining light for the rest of Europe and as such EUR/USD was sold off to open this morning on its lows at 1.2680. U.S investors returned from the long weekend in a bearish mood following the news out of Asia with the “relief rally” that followed Friday’s employment report running out of steam with equity markets in the region shedding around 1% on the day.

:: Data Releases:

AUD: Jul Home Loans
NZD: Q2 Manufacturing Activity
USD: Sep Beige Book & Jul Consumer Credit
GBP: Jul Industrial Production & Jul Manufacturing Production & Sep NIESR GDP estimate
EUR: Jul German Trade Balance
JPY: Jul Trade Balance, Jul Machine Orders & BoJ Monthly Report

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Daily Forex Commentary - Tuesday, 07 Sep 2010

Mon, 06 Sep 2010 21:46:41:150 GMT

:: Australian Dollar: The Aussie dollar traded sideways since the commencement of the week’s trade bouncing between 0.9145 and 0.9175 for the majority of Monday’s Asian session and last night’s offshore trade. A weaker Euro halted any attempts to retest the 92 cent handle in London exchange overnight sending the AUD to 0.9150, and with the U.S markets closed for the Labour Day holiday the AUD/USD opens this morning relatively unchanged at 0.9170. Today the market is anticipating the conclusion of the Reserve Bank of Australia meeting where interest rates are expected to remain unchanged at 4.5%. However the accompanying media release is expected to contain a hawkish assessment of the domestic economy and a cautious outlook for the U.S which should add some support to the local unit. This could provide enough momentum for the Aussie dollar to have a tilt at 92 cents with the critical 0.9220 technical resistance level looming near. Also expected today is a resolution to the local leadership issue which will add some volatility to the currency markets.

- We expect a range today in the AUD/USD rate of 0.9140 to 0.9220

:: Great Britain Pound: Despite a slow grind higher in Asia yesterday the Pound Sterling came under some strong selling pressure by European investors overnight falling from 1.5485 to an eventual low of 1.5350 against the Greenback. In the aftermath of Friday’s dismal PMI numbers it was a pessimistic confidence survey out of the Euro-zone released overnight that dragged the GBP down. It did recover somewhat bouncing back to this morning’s open at 1.5390 ahead of the release of the British Retail Consortium’s sales monitor which will give the market some indication of the U.K consumer’s willingness to spend. With the Aussie dollar holding steady the decline in the Pound puts the GBP/AUD cross rate lower once again opening this morning around 1.6780 after having exchanged as low as 1.6730 at one stage. Today’s RBA announcement is sure to see an increase in the volatility on the cross rate with the most likely scenario pointing to another move lower at some point.

- We expect a range today in the GBP/AUD rate of 1.6700 to 1.6825

:: New Zealand Dollar: The Kiwi bounced back from an early Monday morning sell off to 0.7175, rallying to enter offshore exchange back above the 72 cent handle. Despite the natural disaster in N.Z the currency has performed extremely well over the last week and whilst last night’s negative European data weighed on risk appetite somewhat the effect on the Kiwi was minimal. After initially dipping from 0.7245 to 0.7210 overnight the NZD/USD bounced back to a high of 0.7255 as European investors went home and with the U.S on holidays it then settled to open this morning at 0.7230.

- We expect a range today in the NZD/USD rate of 0.7200 to 0.7275

:: Majors: A weak Sentix Investor Confidence survey, which measures perceptions on the six month outlook for the European economy, inspired a selloff in the EUR/USD during early offshore trade overnight. After momentarily popping above 1.2900 the Euro then retreated following the news to trade as low as 1.2865. With the majority of U.S investors on holiday and most markets closed for Labour day it was a quiet North American session and the big dollar traded within a tight band to open in Asia this morning at 1.2870 against the Euro. USD/JPY followed a similar trajectory trading lower in Europe before finding some support at 84.05 and opens this morning at 84.20 ahead of the conclusion of the Bank of Japan meeting. The central bank is not expected to announce any new expansionary measures having done so already last week. It is however likely they will continue with the recent rhetoric aimed at curbing the Yen’s strength whether it will have any impact remains to be seen.

:: Data Releases:

AUD: RBA Rate Decision
NZD: No Data Expected Today
USD: No Data Expected Today
GBP: Aug BRC Retail Sales Monitor
EUR: Jul German Factory Orders
JPY: BOJ Meeting, Jul Coincident Index & Jul Leading Index

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Daily Forex Commentary - Monday, 06 Sep 2010

Sun, 05 Sep 2010 21:57:45:810 GMT

:: Australian Dollar: The resurgence in the Aussie dollar continued on Friday night with the unwinding of risk trades persisting following the release of the U.S employment report. Heading into the announcement the AUD/USD was hovering around the 91 cent mark and with fewer than expected jobs lost in the non farm sector investors immediately snapped up Aussie dollars sending it to an eventual high around 0.9170. In what looms as a big week ahead on the data front for the local unit investors will be watching price action around the 92 cent level and whether it can break above August 6 highs of 0.9220.

- We expect a range today in the AUD/USD rate of 0.9120 to 0.9220

:: Great Britain Pound: In a very volatile finish to the week’s trade the Pound Sterling recovered from a European sell off to bounce back from a low of 1.5390 and finish on its highs at 1.5465 against the Greenback. An unexpected decline in U.K Services PMI initially weighed on the Cable, however with risk appetite improving and the U.S dollar weakening across the board support came late in the session. This week has several key U.K releases with the BoE Monetary Policy Statement on Thursday the major highlight. A continuation in the rally on the Aussie dollar once again weighed on the cross rate with GBP/AUD finishing the week near its lows at 1.6875.

- We expect a range today in the GBP/AUD rate of 1.6785 to 1.6885

:: New Zealand Dollar: The Kiwi continued its recent rally that has seen it jump over 3.5% from lows around 0.6965 on the first of the month posting a high above the 72 cent handle on Friday night. With little in the way of domestic data the NZD took its cue from offshore events and with negative sentiment towards the global economic environment abating somewhat the N.Z dollar benefited. Helping the NZD/USD was Friday’s U.S employment report that showed a less than expected 54k jobs lost in the nonfarm sector boosting equity markets and commodity based currencies.

- We expect a range today in the NZD/USD rate of 0.7150 to 0.7225

:: Majors: The Euro held on to recent gains finishing 2% higher than its weekly low of 1.2625 at 1.2890 against the Greenback on Friday. Buoyed by recent comments from the ECB and diminishing concerns around a global double dip recession investors shrugged off a lower than expected consumer spending report from the Euro-zone focusing instead on the key U.S employment report. Economist forecasts were for the official unemployment rate to increase from 9.5% to 9.6% and the nonfarm sector to lose around 105k jobs during the month of August. Predictions for the headline unemployment rate were spot on coming in at 9.6% however it was the loss of 54k jobs in the nonfarm payrolls that caught the market somewhat by surprise triggering a relief rally on equity markets and riskier assets in general. The move lost some momentum late in the session however with USD/JPY finishing back at 84.37 and EUR/JPY at 108.85.

:: Data Releases:

AUD: Aug TD Securities Inflation Guauge & Aug ANZ Job Ads
NZD: No Data Expected Today
USD: Labour Day Holiday
GBP: Aug New Car Registrations
EUR: Sep Sentix Investor Confidence
JPY: No Data Expected Today

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Daily Forex Commentary - Friday, 03 Sep 2010

Thu, 02 Sep 2010 21:26:27:993 GMT

:: Australian Dollar: The Australian Dollar opens higher today at 0.9100 after another busy 24 hours. The gains made early yesterday morning above US91 cents were quickly eroded after profit-takers emerged taking the unit down to 0.9085 during Asian trade. Some further heat was taken out of the Aussie after domestic trade data revealed the surplus almost halved in July as exports declined sending the unit down towards 0.9050. The surplus fell to $1.89 billion last month compared to $3.44 billion in June. The Aussie headed into the European session trading at 0.9080 before spending the remainder of the offshore session buoyed by risk appetite after stronger-than-expected economic data releases in the US. Further gains are likely to be capped around the 0.9120 area today as markets await tonight’s key US jobs figures.

- We expect a range today in the AUD/USD rate of 0.9070 to 0.9125

:: Great Britain Pound: Pound Sterling opens lower today at 1.5400 as UK house prices fell the most in six months in August. Prices dropped 0.9 per cent from the previous month pushing the pound down to an overnight low of 1.5350. The currency is likely to remain under pressure given recent comments from Bank of England Deputy Governor Charles Bean that Britain’s economy “remains fragile” and more policy action may be required to boost growth. Meanwhile, the pound opens weaker against both the Australian Dollar (1.6900) and the New Zealand Dollar (2.1550).

- We expect a range today in the GBP/AUD rate of 1.6870 to 1.6940

:: New Zealand Dollar: The New Zealand Dollar opens higher today against the greenback at 0.7140. The unit rallied half-a-US-cent during domestic trade as sentiment was buoyed by higher prices in the latest Fonterra online milkpowder auction. The kiwi hit a high of 0.7170 during overnight trade and also picked up some lost ground against the Australian Dollar as trade data across the Tasman disappointed the market. The NZD/AUD moved to 0.7860 from a four-month low beneath 0.7800 just 24-hours earlier. Attention will turn to offshore events on Friday as traders await tonight''s key US employment data.

- We expect a range today in the NZD/USD rate of 0.7100 to 0.7155

:: Majors: Better-than-expected US economic data overnight boosted investor sentiment and encouraged demand for high-yielding assets. The big dollar fell against several major currencies after US pending home sales rose 5.2 per cent in July compared to a 2.8 per cent drop the previous month. The Euro opens higher today at 1.2825 and nudged a two-week high overnight at 1.2847 after the European Central Bank (ECB) kept interest rates on hold at 1 per cent. Also underpinning the 16-nation currency were comments from ECB President Jean-Claude Trichet who said a double-dip recession is “not on the cards” and risks to the inflation outlook are “on the upside”. The greenback opens largely unchanged against the Japanese Yen at 84.30.

:: Data Releases:

AUD: AiG Performance of Service Index, August
CAD: No data today
EUR: Euro Zone retail sales, July
GBP: PMI Services, August
JPY: No data today
NZD: No data today
USD: Non-Farm Payrolls, August

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Daily Forex Commentary - Thursday, 02 Sep 2010

Wed, 01 Sep 2010 21:15:10:100 GMT

:: Australian Dollar: The Australian Dollar opens higher today against its U.S. counterpart at 0.9095 after strong economic data releases in Australia and China on Wednesday. Hot on the heels of Tuesday's triumvirate of better-than-expected economic data came yesterdays second quarter national accounts which revealed the domestic economy grew at 1.2 per cent for an annual pace of 3.3 per cent. The Aussie dollar rallied sharply on the news towards US90 cents as investors raised their bets the Reserve Bank of Australia will raise interest rates again. Also supporting the local unit on the day was a 2 per cent rally on local equities and news from China the official Purchasing Managers Index rose to 51.7 in August from a 17-month low of 51.2 in July. Meanwhile, the Aussie hit a new 4-month high against the kiwi yesterday at 1.2822.

- We expect a range today in the AUD/USD rate of 0.9060 to 0.9135

:: Great Britain Pound: Pound Sterling opens higher today against the greenback at 1.5445. The currency initially dropped to an overnight low of 1.5336 after local manufacturing growth slowed to its weakest level in nine months. The August manufacturing gauge fell to 54.3 from a revised 56.9 in July. Despite a late rally up to 1.5491, the pound is off its highs and is likely to remain under pressure near-term as forthcoming fiscal austerity measures are expected to subdue growth. Meanwhile, the pound is weaker against both the Australian Dollar (1.6959) and the New Zealand Dollar (2.1680).

- We expect a range today in the GBP/AUD rate of 1.6900 to 1.7000

:: New Zealand Dollar: The New Zealand Dollar opens higher today against the greenback at 0.7110 after stronger than expected manufacturing data in the US prompted another “risk rally”. During yesterday’s domestic session, the kiwi received a much-needed boost from news across the Tasman that the Australian economy expanded by 1.2 per cent in the second quarter. The currency edged its way towards 0.7040, recovering some lost ground after an initial adverse reaction from investors after the collapse of South Canterbury Finance. However, with the Aussie dollar soaring yesterday, the kiwi took a hit on the cross-rate falling to fresh four-month lows around 0.7800.

- We expect a range today in the NZD/USD rate of 0.7060 to 0.7135

:: Majors: Demand for higher-yielding assets overnight has weakened the greenback against several major currencies after a report in the US showed manufacturing accelerated at a faster pace than economists had forecast. The big dollar opens at 84.40 versus the Japanese Yen after the Institute for Supply Management’s measure of US manufacturing rose to 56.3 in August from 55.5 in July. The “risk rally” may be short-lived however as most recent economic data releases in the US have suggested the Federal Reserve may need to provide more stimulus to preserve the economic recovery. Meanwhile, the Euro opens sharply higher at 1.2806 despite a gauge of manufacturing in the 16-nation region declining to 55.1 in August from 56.7 in July. In overnight trade the Euro moved between a low of 1.2662 up to a high of 1.2855.

:: Data Releases:

AUD: Trade Balance, July
CAD: No data today
EUR: Euro Zone GDP, Q2
GBP: Nationwide House Prices, August
JPY: No data today
NZD: No data today
USD: Pending Home Sales, July

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Daily Forex Commentary - Wednesday, 01 Sep 2010

Tue, 31 Aug 2010 22:18:36:503 GMT

:: Australian Dollar: Australian economic data released yesterday surprised the market somewhat with Retail Sales, Building Approvals and the Current Account all coming in above expectations. Consumer spending rose 0.7% during July, up from 0.4% the previous month however it was the massive narrowing in the Trade Deficit from 16.5 billion AUD to 5.6 billion, the narrowest since 2002, which attracted the most attention. The news provided some support for the Aussie dollar which initially rallied from early morning lows of 0.8905 following the news to an intraday high of 0.8955. Despite the strong domestic economy offshore events dictated direction during the afternoon and overnight sessions with global investors concerned about the prospects for Japan and the U.S weighing on the AUD/USD exchange rate. This morning sees the local unit open at 0.8900 with support expected to come from what is likely to be a strong Australian GDP result today.

- We expect a range today in the AUD/USD rate of 0.8885 to 0.8985

:: Great Britain Pound: Short term technical support on the GBP/USD at 1.5450 gave way during the Asian afternoon yesterday with the market ignoring a slight increase in Mortgage Approvals focusing instead on a less than expected increase in private sector lending and economic developments in North America. The Cable traded to a low of 1.5330 overnight following an increase in demand for the Greenback and Yen after the release of the U.S Federal Reserve Banks minutes to the August 10 policy meeting. The GBP/AUD cross rate also opens lower at 1.7200 this morning edging towards support at 1.7180 with this level likely to be tested following the release of Australian economic growth data today.

- We expect a range today in the GBP/AUD rate of 1.7120 to 1.7280

:: New Zealand Dollar: Despite some positive sentiment from across the Tasman yesterday and a stronger than expected 3.1% rise in N.Z Building Permits for July the Kiwi tracked lower from yesterdays open around 0.7035 to exchange as low as 0.6965 against the Greenback overnight. All eyes were on the release of the U.S Federal Reserve Bank minutes to the August 10 meeting with the market somewhat optimistic leading into the announcement. The release however gave very little in the way of new information and highlighted the delicate nature of the predicament the central bank finds itself in. Although it was weighed down by negative risk sentiment overnight the NZD/USD opens up from its lows at 0.6990 whilst the AUD/NZD cross is at its highest level since April 30 at 1.2755.

- We expect a range today in the NZD/USD rate of 0.6950 to 0.7020

:: Majors: Following the Bank of Japan’s announcement to expand its bank lending program by 10 trillion Yen on Monday Japanese Prime Minister Naoto Kan announced yesterday a further 920 billion yen would be spent by the government as it attempts to spur domestic demand and weaken the strengthening currency. The co-ordinated strategy was aimed at reversing the Yen’s strength however the market was less than impressed by the announcements and USD/JPY fell from 84.65 to enter the European session near the 84 handle at 84.05. In offshore trade investors were keenly anticipating the release of the U.S Federal Reserve Banks minutes from the last meeting with the expectation that more detail on how the Fed plans to inspire growth to be revealed. The market was somewhat disappointed by the release as it lacked any new information and reinforced sentiment chairman Bernanke delivered over the weekend. Risk aversion returned with policy makers uncertain if the downward revisions in economic growth would restrain consumer spending “for some time” triggering another round of USD/JPY selling from an offshore high of 84.58 to 83.82. In other news German unemployment came in slightly better than expected sparking a rally in the EUR/USD from 1.2630 to an eventual high near 1.2750 prior to the Fed’s announcements and opens this morning at 1.2680.

:: Data Releases:

AUD: Q2 GDP
NZD: Aug ANZ Commodity Prices
USD: Aug ADP Employment & Aug ISM Manufacturing
GBP: Aug PMI Manufacturing
EUR: Aug Forecast PMI Manufacturing
JPY: Aug Vehicle Sales

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Daily Forex Commentary - Tuesday, 31 Aug 2010

Mon, 30 Aug 2010 21:45:21:973 GMT

:: Australian Dollar: The Australian Dollar moved above US90 cents for the first time in over a week as sentiment was buoyed by recent comments from the US Federal Reserve that it is prepared to take steps to safeguard the world’s largest economy from falling back into recession. Early yesterday, the Aussie hit a high of 0.9030 as commodity prices firmed and the local equity market rallied. However, the Aussie lost some ground late in the Asian session, dipping back to 0.8970 after the Bank of Japan’s announcement to boost funding facilities was not viewed by the market as doing enough to curb the Yen’s dramatic advance. The Aussie hit an overnight low of 0.8916 and opens near this level this morning. Attention will turn to domestic events this week with current account data today and the release tomorrow of second quarter national accounts which is expected to show a small increase in growth compared to the previous quarter. The AUD remains strong against the Euro (0.7035) and the New Zealand Dollar (1.2600).

- We expect a range today in the AUD/USD rate of 0.8900 to 0.8960

:: Great Britain Pound: Pound Sterling opens lower today against the greenback today at 1.5450. Due to London markets being closed to mark summer bank holiday, trading was fairly subdued and the currency drifted down towards an overnight low of 1.5455 as U.K. house prices slipped for a second month in August, down 0.3 per cent compared to a 0.1 per cent decline in July. Meanwhile, the pound opens marginally higher against both the Australian Dollar (1.7320) and the New Zealand Dollar (2.1850).

- We expect a range today in the GBP/AUD rate of 1.7280 to 1.7345

:: New Zealand Dollar: The New Zealand Dollar opens lower against the greenback today at 0.7060. During Monday’s domestic session the kiwi hung onto its recent gains made last Friday on the back of revived hopes for the US economy. Also supporting the unit above US71 cents yesterday was the release of local trade data which revealed the value of New Zealand’s exports continue to rise after a 12 per cent increase in July to NZ$3.6bio. The trade balance came in at a deficit of NZ$186mio for July which was much lower than the average deficit for the same month over the last five years. During offshore trading action the kiwi followed the Australian Dollar and the Euro lower all the way down to this morning’s opening level.

- We expect a range today in the NZD/USD rate of 0.7050 to 0.7090

:: Majors: The greenback has fallen sharply against the Japanese Yen and opens this morning in Sydney at 84.52. The Yen advance was precipitated by the Bank of Japan (BOJ) which expanded its bank loan program amid government pressure to stimulate the economy. The BOJ will boost the amount of funds in the facility by 10 trillion Yen to 30 trillion and said yesterday its action “will encourage a decline in market interest rates and further enhance monetary conditions” The big dollar has slumped from a 24-hour peak of 85.85 as the size of the stimulus disappointed some analysts and may not be enough to halt the Yen’s ascent. In US economic data, incomes rose only 0.2 per cent in July fuelling fears of slower spending in the months ahead. Meanwhile, the Euro opens lower today at 1.2660.

:: Data Releases:

AUD: Current account, Q2
CAD: GDP, Q2
EUR: German Unemployment, August
GBP: Mortgage Approvals, July
JPY: Industrial Production, July
NZD: Building Permits, July
USD: Consumer Confidence, August

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Daily Forex Commentary - Monday, 30 Aug 2010

Sun, 29 Aug 2010 21:27:23:080 GMT

:: Australian Dollar: The Australian Dollar is stronger across the board today and moved sharply higher against the greenback late in the offshore session on Friday. After spending most of last week being supported around the 0.8850 area, the Aussie opens at 0.8990 on Monday as risk appetite returned after a speech by U.S. Federal Reserve chairman Ben Bernanke who pledged to provide further "accommodation" in order to prevent the world's largest economy from slipping into a double dip recession. The Aussie hit a 24-hour high of 0.8998. Attention will turn to domestic events this week with current account data tomorrow and Wednesdays release of second quarter national accounts which is expected to show a small increase in growth compared to the previous quarter. The Aussie opens higher against the Euro (0.7050), the pound (0.5780) and the Japanese Yen (76.68).

- We expect a range today in the AUD/USD rate of 0.8980 to 0.9040

:: Great Britain Pound: Pound sterling opens little changed against the greenback (1.5523) despite stronger than expected local growth data announced on Friday. U.K. gross domestic product rose 1.2 per cent in the three months to June as construction expanded quicker than previously estimated. Over the last 24 hours the pound traded between a low of 1.5442 and a high of 1.5544. Despite a risk rally in currencies such as the Australian and New Zealand Dollars, Sterlings appreciation was limited as the breakdown of the GDP data revealed that the solid rises in household and government spending is unlikely to be maintained. As a result, the pound opens weaker against both the Aussie (1.7260) and the kiwi (2.1760).

- We expect a range today in the GBP/AUD rate of 1.7210 to 1.7285

:: New Zealand Dollar: The New Zealand Dollar opens higher today against its U.S. counterpart at 0.7122. Higher commodity prices supported the local unit last Friday during the domestic session with support holding around the US70-cent area. The currency came to life during the offshore session hitting a high of 0.7130 as risk appetite returned after a speech by U.S. Federal Reserve chairman Ben Bernanke who pledged to provide further "accommodation" in order to prevent the worlds largest economy from slipping into a double dip recession. Second quarter U.S. economic growth data (1.6 per cent) was not as bad as the market had been expecting. Attention will turn to domestic events this week kicking off with July trade data scheduled for release today.

- We expect a range today in the NZD/USD rate of 0.7080 to 0.7145

:: Majors: The Japanese Yen weakened across the board on Friday night as safe-haven demand was eroded after a speech in the United States by Federal Reserve Chairman Ben Bernanke who pledged to safeguard the economic recovery. The big dollar opens at 85.33 up from 15-year lows as Mr Bernanke commented that he expects a "modest pace" of economic growth and that the FOMC is prepared to provide further "accommodation" if needed. Compared to the pre-data hype, there was only a muted reaction on currency markets to second quarter GDP in the U.S. which came in at 1.6 per cent. Most economists had forecast growth of 1.4 per cent for the period April through June. University of Michigan confidence data came in at 68.9 for August which was lower than the previous month. Meanwhile, the Euro opens little changed at 1.2729.

:: Data Releases:

AUD: New Home Sales, July
CAD: Current account, Q2
EUR: Euro Zone Consumer Confidence, August
GBP: No Data Today
JPY: No Data Today
NZD: Trade Balance, July
USD: Personal Income, July

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Daily Forex Commentary - Friday, 27 Aug 2010

Thu, 26 Aug 2010 22:44:00:557 GMT

:: Australian Dollar: The Conference Board Leading Economic Index for Australia rose 0.1% in June 2010 however private capital expenditure unexpectedly fell -4% from the previous quarter causing the Aussie to dip momentarily to 0.8830 US Dollars midday in Asia. Other than this minor stumble the Aussie Dollar remained range bound between 0.8850-0.8900 versus the US Dollar. Improved risk sentiment saw the Aussie rally briefly to 0.8915 against the US Dollar before being pushed back to 0.8852. This morning the Aussie opens at 0.8860.

- We expect a range today in the AUD/USD rate of 0.8825 to 0.8900

:: Great Britain Pound: The Cable rally failed to reach 1.5600 against the US Dollar despite improved German consumer confidence after upbeat risk flows from equities fizzled. UK retailers reported sales volumes rose by 35pts from 33pts in July exceeding expectations of a 23pt gain. The greater than expected sales figures could not prevent the Sterling from sliding down to 1.5502 following better than expected jobless data from the US. The Pound rebounded; again making an attempt at 1.5600 US Dollars amid speculation policy makers in the US will announce further easing measures. The Pound opens today at 1.5524 US Dollars, 1.7528 Aussie and 2.2083 Kiwi.

- We expect a range today in the GBP/AUD rate of 1.7480 to 1.7535

:: New Zealand Dollar: The New Zealand Dollar rose against all 16 of its most-traded counterparts, gaining for the first time in three days versus the greenback, following speculation Japanese policy makers will intervene to halt the Yen’s advance. The Kiwi reached for 0.7100 US Dollars offshore after it was revealed US jobless claims had fallen by 31,000 from previous week. However fears of a double dip recession in the US remain ahead of Fed Chairman Bernanke’s speech this evening in which investor’s widely expect to point towards further stimulus measures. The kiwi opens today at 0.7030 US Dollars.

- We expect a range today in the NZD/USD rate of 0.7000 to 0.7055

:: Majors: German GFK consumer confidence rose to its highest level in more than 2 years hitting 4.1 up from 4.0 previously. The Euro rallied to 1.2745 against the US Dollar upon release of the news. The M3 money supply printed at 0.2% versus 0.4% indicating that credit remains weak, repelling the Euro from the 1.2750 area. Better than expected US weekly jobless claims sent the Euro tumbling to 1.2265 versus the Greenback before consolidating around 1.2700. Meanwhile the Yen weakened on speculation the departure to the U.S. of central bank chairman Masaaki Shirakawa will delay any plan to announce additional stimulus measures. This comes as more political uncertainty presents itself in Japan ahead of a leadership challenge Prime Minister Naoto Kan faces next month. Offshore the Greenback weakened against the Yen amid speculation the US Federal Reserve will announce a more active measure to boost the faltering US economy.

:: Data Releases:

AUD: No Data Today
CAD: No Data Today
EUR: German CPI, August
GBP: GDP, Q2
JPY: No Data Today
NZD: No Data Today
USD: GDP, Q2

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Daily Forex Commentary - Thursday, 26 Aug 2010

Wed, 25 Aug 2010 23:01:12:160 GMT

:: Australian Dollar: Australian construction work done rose 3.5% in the June quarter following a 1.9% rise in the previous quarter. The result exceeded market expectations of a 3% rise. Combined with encouraging export figures out of Japan, the Australian Dollar rose to challenge 0.8870 against the Greenback. Heading into the European session investors propelled the Aussie to 0.8890 US following continued positive economic news flowing from Europe. The flurry for risk was short lived as traders returned to the Greenback amid increasing risk of a double dip recession in the world’s largest economy. Lacklustre demand for durable goods and declining home sales in the US saw the Aussie slump to 0.8770 USD as traders reverted to the Dollar safe haven. This morning the Aussie opens back at 0.8845.

- We expect a range today in the AUD/USD rate of 0.8785 to 0.8885

:: Great Britain Pound: Sparked by the improved business climate in Europe the Pound opened early offshore at 1.5460 USD. During the evening the Sterling made a shaky climb to 1.5470 against the Big Dollar following worse than forecast U.S. economic data which added to concern about the world’s largest economy. U.K. stocks dropped for a second day, lead by mining and resource companies, as base metals declined. The discouraging news out of the US enticed investors to choose the safety of government debt. Today the Pound opens at 1.5474 against the Greenback. Meanwhile the Pound starts the day at 1.7480 Aussie and 2.2040 Kiwi.

- We expect a range today in the GBP/AUD rate of 1.7375 to 1.7575

:: New Zealand Dollar: The Kiwi traded around the 0.7030 early in Asia before unexpected expansions in Japanese exports and Australian construction saw the Kiwi test 0.7050 US briefly. Offshore improvement in German business sentiment stoked investor risk appetite pushing the Kiwi to 0.7060 against the Greenback. Later in the evening the NZD/USD sunk towards 0.6950 following further disappointing data out of the US, Durable Goods missed their forecast by a wide margin increasing by only 0.3% versus expectations of 3.0% rise, while US new home sales declined numbering only 276k. This morning the Kiwi opens buying 0.7020 US Dollars.

- We expect a range today in the NZD/USD rate of 0.6950 to 0.7050

:: Majors: In Asia the Euro was capped at 1.2660 against the Greenback in the aftermath of S&P’s downgrade of Ireland from AA to AA-. Offshore risk appetite revived following an improvement in Germany’s IFO business sentiment release. German business climate readings in August jumped to 106.7 from 106.2 previously. The Euro catapulted to 1.2725 against the US Dollar as traders focused on German data. However weak US home sales and Durable Goods figures renewed investor insecurities sending the Euro back down to 1.2660 US. Meanwhile in Japan the Yen weakened to eventually trade back at 84.80 U.S dollars after a flurry of comments from Japanese Finance Minister Yoshihiko Noda yesterday who pledged to take action when necessary as the rising Yen threatens the Japanese economy. Japan''s export growth slowed for the fifth straight month in July as Cooling global demand poses a major risk for Japans export-driven recovery.

:: Data Releases:

AUD: Jun Conference Board Leadign Index
NZD: No Data Expected Today
USD: Q2 Mortgage Delinquencies & Weekly jobless claims
GBP: Aug CBI Realised Sales
EUR: Aug GfK German Consumer Climate
JPY: No Data Expected Today

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Daily Forex Commentary - Wednesday, 25 Aug 2010

Tue, 24 Aug 2010 22:07:49:267 GMT

:: Australian Dollar: With political uncertainty hanging over the Aussie dollar recent attempts at a rally have been short lived as resistance around the 89 cent mark put a lid during yesterdays Asian afternoon session. In offshore trade risk aversion persisted as U.S housing data came in at 10 year lows and equity markets fell. The bearish sentiment hurt the AUD/USD which fell below recent support at 0.8840 to trade within a whisker of the 88 cent mark and opens this morning at 0.8815. AUD/JPY selling also weighed on the local unit with early morning exchange at 74.10 ahead of critical support around the 73 level.

- We expect a range today in the AUD/USD rate of 0.8785 to 0.8875

:: Great Britain Pound: Disappointing U.K Mortgage approval data weighed on the Pound Sterling in early offshore trade however after several attempts support at 1.5370 held against the Greenback. USD weakness emerged during the North American morning session providing a boost for GBP/USD which rallied a big figure to 1.5470. However the move was relatively short lived as investors flocked back to the safety of the U.S dollar with risk aversion fears persisting to send the Cable back to this morning’s open at 1.5405. The GBP/AUD cross rate opens higher this morning thanks mainly to a weaker Aussie dollar exchanging at 1.7450 with major technical resistance looming ahead of 1.7550.

- We expect a range today in the GBP/AUD rate of 1.7400 to 1.7525

:: New Zealand Dollar: With many investors expecting the RBNZ to lift official interest rates at the next meeting yesterday’s Q3 two year inflation expectations release caught the markets attention. The result came in at 2.6% and below the previous 2.8% reading and the Kiwi sold off in local trade to test the psychological 70 cent level. With poor U.S economic data released overnight the Greenback initially weakened, sending the NZD/USD back up to 0.7080. The move was short lived however as risky assets such as equities declined sharply wiping out the gains. This morning sees the NZD exchanging at 0.7028 after posting an early morning low of 0.6990 against the USD.

- We expect a range today in the NZD/USD rate of 0.6975 to 0.7075

:: Majors: USD/JPY finally broke out of its recent range crashing through 15 year lows and support at 84.70 to exchange as low as 83.60 overnight. With Japanese authorities failing to announce any measures aimed at curbing the Yen’s strength the JPY continued to rally buoyed by increasing risk aversion. In a sign that the U.S industrial sector is performing well the Richmond Fed Manufacturing survey released overnight beat expectations with a reading of 11 above forecasts for a drop from 16 to 8. However it was U.S existing home sales that grabbed the headlines as it plunged 27.2% in July, far worse result than economist forecasts for a fall of around13% for the month. The news sent North American equity markets lower with the Dow Jones finishing the session 1.3% in the red. The big dollar regained some lost ground to open this morning at 83.95 against the Yen ahead of todays Japanese Trade Balance whilst in trade with the Euro it opens relatively unchanged at 1.2625.

:: Data Releases:

AUD: Jun Conference Board Leadign Index & Q2 Construction Work Done
NZD: No Data Expected Today
USD: Jul Durable Goods & Jul New Home Sales
GBP: No Data Expected Today
EUR: Aug German IFO Business Climate
JPY: Jul Trade Balance & Jul Corporate Services Price Index

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Daily Forex Commentary - Tuesday, 24 Aug 2010

Mon, 23 Aug 2010 22:53:38:723 GMT

:: Australian Dollar: Yesterday’s knee jerk reaction to a hung parliament saw the Aussie initially tumble almost a cent from Friday’s close to exchange around 0.8850 in early Monday morning trade. The Australian Dollar recouped its post-election losses climbing to 0.8980 against the US Dollar offshore as the election results were digested. Traders bet the political stalemate will result in a coalition government which will postpone or reduce the widely unpopular proposed mining tax. The Australian Dollar opens today buying 0.8911 US following dovish sentiment from the US and a drop in oil prices.

- We expect a range today in the AUD/USD rate of 0.8850 to 0.8950

:: Great Britain Pound: The Pound lay flat during Asia sitting snuggly between 1.5550 -1.5570 versus the Greenback before breaching 1.5600 late in the session. Moving offshore surveys by Markit Economics Ltd. and YouGov Plc found consumer finances remained downbeat while Grant Thornton and the Institute of Chartered Accountancy in England and Wales said business confidence fell in the third quarter as Prime Minister David Cameron’s budget cuts begin to curb economic growth. The lagging prospects for growth continued, dragging the Sterling back towards 1.5500 US. This morning the Pound open’s at 1.7410 AUD and 2.1950 against the Kiwi.

- We expect a range today in the GBP/AUD rate of 1.7320 to 1.7480

:: New Zealand Dollar: The Kiwi remained between 0.7060-7070 US for most of the Asian session yesterday. Offshore the Kiwi initially dipped to 0.7040 against the US Dollar before regaining its strength to break 0.7100 US. Nervous investors pared back Kiwi gains with the dubious political situation in Australia expected to persist for a few weeks. The Kiwi consolidated above the 0.7050 level against the Greenback after posting the biggest weekly decline since May 16th opening this morning buying 70.60 US cents.

- We expect a range today in the NZD/USD rate of 0.7025 to 0.7085

:: Majors: Flash manufacturing and services PMI from Europe over night were a mixed bag. Euro Zone Flash Services hit the mark at 55.6 supported by an unexpected gain of 58.5 from German services PMI. Meanwhile Flash manufacturing declined to 55 from 56.7; however it did remain above the 50 level which determines the bullish or bearish sentiment. The Euro traded tightly between 1.2690-1.2720 USD spending most of the European session above 1.2700 before dipping below 1.2650 as investors remained skittish about the prospects for the U.S economy.

:: Data Releases:

AUD: No Data Expected Today
NZD: Q3 Inflation Expectations
USD: Jul Existing Home Sales & Aug Richmond Fed Manufacturing Index
GBP: Jul BBA Loans for House Purchases
EUR: Q2 German Final GDP & Jun Euro-zone Industrial Orders
JPY: No Data Expected Today

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Daily Forex Commentary - Monday, 23 Aug 2010

Sun, 22 Aug 2010 22:55:48:727 GMT

:: Australian Dollar: Political uncertainty has pushed the Australian Dollar to open this morning at 0.8860 against the US Dollar, sliding as much as 0.8%. The Australian Federal election, for the first time in 70 years, has failed to deliver a majority government. Currently the Australian Labour Party has 70 seats out of 150 while opposition Leader Abbott’s Liberal-National coalition has 72, forcing both Leaders to open negotiations with independent lawmakers to form a minority government. The prospect of a less stable government and the possible drift to less friendly business policies will certainly weigh down investor opinion as the two major parties undergo talks.

- We expect a range today in the AUD/USD rate of 0.8825 to 0.8900

:: Great Britain Pound: Following Thursday’s surprisingly strong UK retail sales figures the British Pound continued to drift lower as investors sold off risk. The Sterling fell more than 1 cent to 1.5463 US offshore after reaching 1.5596 US early in Asia. Political strife may be stirring once again in the UK with Conservative ministers brushing off reports of emerging rifts within the coalition as spending cuts loom. The Cable regained a foot hold following some disappointing US economic data trading sideways around 1.5530 US. This morning the Pound opens at 1.5537 US Dollars. Meanwhile, the hung parliament in Australia has seen the Sterling open stronger against the Aussie at 1.7511 and buying 2.2020 Kiwi.

- We expect a range today in the GBP/AUD rate of 1.7480 to 1.7535

:: New Zealand Dollar: The Kiwi remained capped at 0.7080 US Dollars during Asia. Despite PPI input for the previous quarter pleasantly surprising investors on Thursday the Kiwi was weighed down by political uncertainty of its Tasman neighbour. After a knife-edge election on Saturday it''s unclear who will govern Australia, as the major parties remain in a deadlock for power. Investors selling out of Australia also left the Kiwi behind. The Kiwi slid more than 2% to 0.7000 versus the Greenback overnight. This morning the Kiwi opened at 0.7047 against the Big Dollar

- We expect a range today in the NZD/USD rate of 0.7020 to 0.7070

:: Majors: The Euro dropped for the second week in a row against the Greenback as weaker economic reports from Japan and the US continued to heighten risk aversion, dampening investor appetite. Offshore the Euro opened buying 1.2831 US before falling more than 2% to 1.2664, its lowest level since July 15th. Meanwhile European stocks posted their largest decline in 7 weeks. Japanese bonds gained for a second week as evidence global growth is slowing builds. The US Dollar weakened to 85.18 Yen early in Asia while the Bank of Japan continues to assess the economic impact of the Yen’s rise to 15 year highs. The USD climbed to 85.80 Yen offshore in the lead up to the Philly Fed’s manufacturing index which was widely expected to increase from 5.1 to 7.1. The resulting decline of -7.7 showing an outright contraction in US demand reduced the US to 85.60 Yen.

:: Data Releases:

AUD: No Data Today
CAD: No Data Today
EUR: German PMI, August
GBP: No Data Today
JPY: No Data Today
NZD: No Data Today
USD: Chicago Fed National Activity Index, July

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Daily Forex Commentary - Friday, 20 Aug 2010

Thu, 19 Aug 2010 21:48:00:690 GMT

:: Australian Dollar: The Australian Dollar endured a lack lustre session during Asian time yesterday with the little battler limited to a 35 pip range. During the local session the AUD moved between 0.8950 and 0.8980 and it wasn’t until late in the European and US sittings that the local dollar really moved, falling to a low of 0.8904 after a series of weak economic reports in the United States sparked fresh fears of more than just a slowdown in global growth. The Australian dollar has been held to ransom by offshore events this week and last night was no different. Tomorrow’s general election will add further volatility for the Aussie, with expectations of tightly-contested ballot. Traders are expected to square up their AUD positions to avoid being caught short Monday morning should the election offer any surprises. The Aussie opens at 0.8926.

- We expect a range today in the AUD/USD rate of 0.8860 to 0.8945

:: Great Britain Pound: Pound Sterling (1.5590) moved higher in overnight trade after U.K. retail sales came in higher than market expectations. Sales rose 1.1 per cent from the previous month for an annualised rate of 1.3 per cent pushing Sterling sharply higher towards 1.5670. However, disappointing U.S. economic data released late in the session dampened early enthusiasm on UK and European equity markets and the currency gains were short-lived. Despite this, the pound has managed to outperform both the Australian Dollar (1.7460) and the New Zealand Dollar (2.2060).

- We expect a range today in the GBP/AUD rate of 1.7440 to 1.7510

:: New Zealand Dollar: The New Zealand Dollar was pinned to yet another 35-point range throughout yesterday’s domestic session due to a lack of leads in the Asian region. Local producer price data (+1.4 per cent in the June quarter) provided support for the kiwi around US71 cents before heading into the offshore time zone around the 0.7140 area. There was considerably more action on the cross rates with the NZD/AUD rallying off multi-month lows towards 0.7965. Against the Aussie, the kiwi opens lower today at 0.7920. Against the greenback, the kiwi moved sharply lower in offshore trade and opens at 0.7060 after a series of weaker-than-expected economic reports released overnight in the United States sparked fresh fears of more than just a slowdown in global growth.

- We expect a range today in the NZD/USD rate of 0.7020 to 0.7090

:: Majors: Worse-than-expected economic data released in the United States overnight has fuelled a renewed bout of risk aversion, boosting the greenback and Japanese Yen. The Yen strengthened to 84.90 versus the big dollar after initial jobless claims in the U.S. rose by 12,000 to 500,000 in the week ending August 14. Also weighing heavily on risk sentiment was the lowest reading in 12 months for manufacturing in the mid-Atlantic States. The Federal Reserve Bank of Philadelphia general economic index fell to minus 7.7 as activity shows signs of stalling. The data pushed down the price of oil to US$74.43/barrel and sparked late sell-offs in equity markets in the U.K., Europe and the U.S. Meanwhile, the Euro opens lower today at 1.2820 after trading in a range between 1.2901 down to 1.2771 over the last 24 hours.

:: Data Releases:

AUD: No Data Today
CAD: CPI, July
EUR: No Data Today
GBP: No Data Today
JPY: No Data Today
NZD: Credit Card Spending, July
USD: No Data Today

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Daily Forex Commentary - Thursday, 19 Aug 2010

Wed, 18 Aug 2010 21:43:45:030 GMT

:: Australian Dollar: The Australian Dollar opens lower today against the greenback at 0.8980. The Aussie moved lower during yesterday’s domestic session after wages data provided further evidence the Reserve Bank of Australia is likely to leave rates on hold. In what was a fairly lacklustre session, the local unit retreated towards 0.9020 as total hourly rates rose a modest 0.8 per cent in the June quarter for an annualised rise in the wage cost index of 3.0 per cent. Offshore, support gave way around the US90 mark which saw the unit trade as low as 0.8970 as BHP Billiton upped their bid by $1bio for Potash Corp, therefore pressuring the Aussie and strengthening the Canadian Dollar.

- We expect a range today in the AUD/USD rate of 0.8940 to 0.9000

:: Great Britain Pound: Pound Sterling recovered from a three-week low overnight of 1.5497 after minutes of the Bank of England’s last meeting revealed that no policy makers voted to step up bond purchases. The monetary policy committee also voted 8 – 1 in favour of keeping the benchmark interest rate at an all time low of 0.5 per cent. Against the greenback the pound opens at 1.5591 in the lead-up to tonight’s July retail sales data in which the market is expecting slower growth. Meanwhile, the pound is stronger against the Australian Dollar (1.7350) and weaker against the New Zealand Dollar (2.1840).

- We expect a range today in the GBP/AUD rate of 1.7300 to 1.7365

:: New Zealand Dollar: The New Zealand Dollar traded sideways during Wednesday’s local session between US71 cents and 0.7120 due to a lack of leads both domestically and in the region. Investors continued to favour risk early in the offshore time zone taking the kiwi to a high of 0.7191 before tracking a weaker Euro down towards 0.7150. The unit opens today at 0.7135 ahead of local economic data in the form of consumer confidence and credit card spending. The kiwi has recovered somewhat against the Australian Dollar bouncing from three-and-a-half month lows of 0.7850 to this morning’s opening level of 0.7940.

- We expect a range today in the NZD/USD rate of 0.7115 to 0.7150

:: Majors: The Euro received a boost early in the session hitting an overnight high of 1.2920 after European construction output rose the most in three months. Led by a rebound in Spain, construction in the 16-nation euro region increased 2.7 per cent from the previous month. The currency gains were short-lived however and the Euro succumbed to another bout of Yen strength. The Euro is trading near 6-week lows versus the Japanese Yen (109.78) and opens today against the U.S. at 1.2850. Meanwhile, the greenback fell as low as 85.18 against the Yen before reversing some of the losses as U.S. equities moved back into positive territory late in the session. A positive sales outlook from retail giant Target provided a late boost to equity market sentiment which filtered through to the big dollar (85.42).

:: Data Releases:

AUD: Average Weekly Earnings
CAD: No Data Today
EUR: German Producer Prices, July
GBP: Retail Sales, July
JPY: All Industry Activity Index, June
NZD: Producer Prices, Q2
USD: Philapelphia Fed Manufacturing Survey, August

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Daily Forex Commentary - Wednesday, 18 Aug 2010

Tue, 17 Aug 2010 21:33:44:790 GMT

:: Australian Dollar: Despite a benign interest rate outlook for the near-term, the Australian Dollar picked up some lost ground towards US90 cents during local trade on Tuesday. The minutes of the Reserve Bank of Australia’s most recent meeting did not contain any surprises and reiterated the economic outlook is evenly balanced. Inflation is forecast to bottom out at 2.75 per cent before rising to the top end of the target band (3.00 per cent) as growth picks up. Having said all of this, the next move in interest rates is still likely to be up, therefore helping to underpin the local currency. Not to mention higher gold this morning (US$1,225.50/oz) and stronger equity markets across Europe and the U.S. overnight which has boosted sentiment. The Aussie opens today at 0.9050.

- We expect a range today in the AUD/USD rate of 0.8990 to 0.9080

:: Great Britain Pound: As expected, growth in U.K. consumer prices slowed in July to 3.1 per cent compared to 3.2 per cent in June. The pound was little-changed after the report trading at 1.5659 but moved lower later in the session as the inflation data pours cold water on any prospect of a near-term interest rate rise in the U.K. The pound opens lower today against the greenback at 1.5580. Tonight, the Bank of England is scheduled to release the minutes of its last meeting. Meanwhile, the pound is sharply lower against both the Australian Dollar (1.7210) and the New Zealand Dollar (2.1880).

- We expect a range today in the GBP/AUD rate of 1.7140 to 1.7230

:: New Zealand Dollar: The New Zealand found some much-needed support around the 0.7040 area during the local session on Tuesday as traders speculated last week’s greenback rally was a shade overdone. Stronger gold and commodity prices also helped underpin the local unit which clawed its way back toward US71 cents. During the offshore session, the unit moved to an overnight high around 0.7140 as equity markets rallied across Europe and the United States, boosting sentiment. However, the kiwi continues to be outperformed by its trans-Tasman rival and opens today at fresh 15-week lows around 0.7860.

- We expect a range today in the NZD/USD rate of 0.7070 to 0.7145

:: Majors: The Japanese Yen weakened marginally overnight as stock market gains across Europe and the United States reduced safe-haven demand. The greenback opens at 85.50 amid continued speculation Japanese policy-makers will intervene to curb Yen strength if it breaks the 15-year high of 84.73 reached on August 11, 2010. The Euro rose as government debt auctions in Ireland and Spain were well received by the market easing concerns the two nations will struggle to contain their budget deficits. The 16-nation currency opens today at 1.2880, compared to 1.2825 this time yesterday. Meanwhile, economic data released in the United States overnight showed wholesale costs increased in July for the first time in four months with the Producer Price Index (PPI) rising 0.2 per cent. Industrial production also rose 1 per cent in July.

:: Data Releases:

AUD: Westpac leading index, June; Wage cost index, Q2
CAD: No Data Today
EUR: Euro Zone Construction output, June
GBP: Bank of England meeting minutes
JPY: Leading Index, June
NZD: No Data Today
USD: No Data Today

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Daily Forex Commentary - Tuesday, 17 Aug 2010

Mon, 16 Aug 2010 21:49:48:057 GMT

:: Australian Dollar: Poor growth data released in Japan yesterday was enough for investors to once again eschew riskier assets which saw the Australian Dollar dip towards 0.8860 early in the Asian session. A decline in local motor vehicle sales for July (-2.6 per cent) and weaker equity markets in the region also did nothing to help the Aussie’s cause. The story was only marginally different offshore with the unit steadying and moving back over 0.8950 on the back of stronger gold and commodities. Gold is at a 6-week high of US$1,224.70/oz. Meanwhile, the AUD opens today at 0.8972 against its U.S. counterpart. Today’s release of minutes from the Reserve Bank’s August meeting will be closely watched by currency markets.

- We expect a range today in the AUD/USD rate of 0.8900 to 0.9000

:: Great Britain Pound: Pound Sterling opens marginally higher today against its U.S. counterpart at 1.5661. Greenback weakness across the board took the pound from a low of 1.5534 up to an intraday high of 1.5702 in what was otherwise a lacklustre session. The pound remains vulnerable over planned U.K budget cuts which may cool the pace of economic recovery. Meanwhile, the pound opens weaker against the Australian Dollar at 1.7420 but is stronger against the New Zealand Dollar at 2.2140.

- We expect a range today in the GBP/AUD rate of 1.7400 to 1.7470

:: New Zealand Dollar: The New Zealand Dollar opens largely unchanged against the greenback today at 0.7070. Risk aversion continues to weigh on the currency after weaker-than-expected growth data out of Japan yesterday sparked another round of selling in Asian equity markets and high-yielding currencies. The kiwi hit an intraday low of 0.6990 and was not aided by a local services sector report. Reflecting weaker sales, the BNZ-Business NZ performance of services index fell 4.6 points in July to 50.5. Meanwhile, the kiwi is weaker against the Australian Dollar and opens today at 0.7874.

- We expect a range today in the NZD/USD rate of 0.7020 to 0.7110

:: Majors: The big dollar has continued its dramatic slide against the Japanese Yen and opens today at 85.30. It touched a 15-year low last week at 84.73. Data released yesterday showed Japanese gross domestic product rose at an annualised pace of 0.4 per cent in the three months to June 30, well below economists’ forecasts, fuelling safe-haven demand amid further signs the global economy is faltering. The greenback also slid against the Euro and opens today at 1.2825. In overnight trade, the 16-nation currency moved between a low of 1.2732 and a high of 1.2870. The safe-haven rally was not restricted to the Japanese Yen as the Swiss Franc also rose across the board, along with base metals. Gold is trading at a 6-week high of US$1,224.70/oz.

:: Data Releases:

AUD: RBA board meeting minutes
CAD: No Data Today
EUR: Euro Zone Current Account, June
GBP: CPI, July
JPY: No Data Today
NZD: No Data Today
USD: Producer Price Index, July

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Daily Forex Commentary - Monday, 16 Aug 2010

Sun, 15 Aug 2010 21:19:21:960 GMT

:: Australian Dollar: The Australian Dollar opens a shade lower on Monday at 0.8928 as risk aversion keeps a lid on high-yielding currencies. Whilst the Aussie re-captured US90 cents throughout local trade on Friday, the gains were short-lived as the greenback strengthened across the board amid speculation the Bank of Japan may intervene to curb gains in the Yen which is hindering the nation's recovery. Economic data in the United States on Friday also spooked traders with U.S retail sales in July climbing at 0.4 per cent which was below market expectations and added further evidence, if any was needed, that global growth is stalling. There is no major local economic data scheduled for release today however tomorrow sees the all-important release of the minutes from the RBAs August monetary policy meeting.

- We expect a range today in the AUD/USD rate of 0.8900 to 0.8965

:: Great Britain Pound: Pound Sterling opens largely unchanged against the greenback on Monday at 1.5590. The currency hit an intraday high of 1.5678 early in the session but fell away after local data revealed there was very little change in U.K house prices in July. Recently, the Bank of England pledged to maintain emergency stimulus for the economy and keep interest rates at record low levels. Meanwhile, the pound opens higher against both the Australian Dollar (1.7460) and the New Zealand Dollar (2.2070).

- We expect a range today in the GBP/AUD rate of 1.7425 to 1.7500

:: New Zealand Dollar: Despite stronger-than-expected retail sales data released on Friday, the kiwi is back under US71 cents and opens the new week at 0.7070 as risk aversion keeps a lid on high-yielding currencies. Retail sales rose by 1.3 per cent in June quarter which was better than expected and the largest rise since the March quarter of 2007. The data gave the kiwi a strong boost above 0.7100 during local trade before reaching a 24-hour zenith of 0.7182 during early European trade. However, the greenback strengthened across the board as U.S. economic data continues to point to a slowdown in global growth pushing investors away from riskier assets.

- We expect a range today in the NZD/USD rate of 0.7020 to 0.7110

:: Majors: The Euro opens the new week lower at 1.2760 despite strong German economic growth data released on Friday. The 16-nation currency rallied early in the session to a high of 1.2905 after it was revealed that Germanys economy powered ahead in the second quarter at a rate of 2.2 per cent. The gains on the currency were short-lived however as Euro Zone growth announced later in the session came in at a rather more subdued figure of 1 per cent as consumer confidence and domestic demand remain low. In the United States, University of Michigan index of consumer confidence rose in August to 69.6 whilst U.S. retail sales climbed by 0.4 per cent in July which was lower than market expectations. The greenback strengthened across the board and most notably against the Japanese Yen as investors move away from bets on further Yen gains. The big dollar opens today at 86.17, not far beneath Fridays high of 86.36 amid speculation of Bank of Japan intervention.

:: Data Releases:

AUD: New Motor Vehicle Sales, July
CAD: No Data Today
EUR: Euro Zone CPI, July
GBP: No Data Today
JPY: GDP, Q2
NZD: Performance Services Index, July
USD: Empire Manufacturing, August

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Daily Forex Commentary - Friday, 13 Aug 2010

Thu, 12 Aug 2010 22:10:47:360 GMT

:: Australian Dollar: The Aussie dollar experienced a roller coaster ride over the last 24 hours dropping to 0.8920 in Asia before bouncing back to 90 cents in early Europe only to retest 0.8920 in North American trade overnight. The announcement of July employment data out of Australia yesterday was met with caution despite the economy adding 23.5k jobs in the month, a result which was slightly above economist forecasts of a rise of 20k. With investors nervous about risky assets at the moment the focus instead was on the fact that the rises came in part time employment with full time employment decreasing and coupled with a rise in the participation rate, the headline unemployment rate actually rose from 5.1% to 5.3%. These weighed on the Aussie in local trade yesterday and with poor European economic data released overnight rallies on the AUD/USD were short lived. The Aussie opens this morning at 0.8960 with the recent range between 0.8920 and 0.9000 expected to hold in Asia today before this evenings European and U.S economic data releases.

- We expect a range today in the AUD/USD rate of 0.8920 to 0.9000

:: Great Britain Pound: The Cable ran into some solid resistance above 1.5700 in early London exchange as the market flocked to the safety of the Greenback following some disappointing European Industrial Production data. After momentarily holding up around the 1.5620 level it eventually gave way to more selling pressure and opens this morning near its lows at 1.5575. The weaker Pound puts the GBP/AUD cross rate lower as well at 1.7385 down from yesterdays Asian intraday high of 1.7535.

- We expect a range today in the GBP/AUD rate of 1.7320 to 1.7480

:: New Zealand Dollar: Reaction on currency markets to yesterdays N.Z economic data was fairly muted with Food Prices increasing and the Manufacturing Index contracting. The Kiwi traded sideways around 0.7120 for the majority of the Asian session before staging a rally late in the day to peak at 0.7160. European investors steered away from the high yielding NZD pushing it back below the 71 cent handle to open this morning at 0.7085. The AUD/NZD cross rate opens higher this morning exchanging around its early May highs at 1.2635. Today sees the release of the all important N.Z June Retail Sales with economists forecasting a slight rise from 0.4% the previous month.

- We expect a range today in the NZD/USD rate of 0.7050 to 0.7125

:: Majors: EUR/USD rallied in Asia yesterday clawing back some of its recent losses to bounce back from a low of 1.2830 to enter offshore exchange hovering around the 1.29 handle. An unexpected 0.1% drop in Euro-zone Industrial Output coupled with concerns surrounding the Greek economy (GDP declining and unemployment increasing) triggered another sell off in the EUR overnight however pushing it to a low of 1.2780 against the Greenback. Weekly jobless claims in the U.S increased reinforcing slowing employment growth stateside sending North American equity markets lower on the open and dragging down risk appetite once again. Support on EUR/USD held firm though and it opens this morning at 1.2825 whilst USD/JPY bounced back from another dip below 85 in Asia to open this morning near its overnight highs at 85.90. Whilst data releases in Asia today are fairly limited this evening sees some key information from Europe and the U.S which are sure to keep the big dollar volatile against the other majors.

:: Data Releases:

AUD: No Data Expected Today
NZD: Jun Retail Sales & Jul REINZ House Price Index
USD: Jul CPI, Jul Retail Sales & Aug Prelim Uni of Michigan Confidence Survey
GBP: No Data Expected Today
EUR: Q2 Prelim GDP & Jun Trade Balance
JPY: BoJ Monetary Policy Minutes

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Daily Forex Commentary - Thursday, 12 Aug 2010

Wed, 11 Aug 2010 22:20:58:133 GMT

:: Australian Dollar: A large drop in Australian consumer sentiment as measured by the Westpac-Melbourne Institute survey pushed the Aussie dollar below the 91 cent handle in local trade yesterday. Adding to the selling pressure were fears of a slowdown in Asian growth with lower than forecast Chinese economic data seized upon by early offshore investors. After initially holding around 0.9015 the AUD/USD pushed lower again during the North American session with an unexpected widening in the U.S Trade Deficit heightening risk aversion fears that began following the Fed’s announcement the previous evening. With U.S equity markets and commodity prices trading substantially lower investors dumped the Aussie dollar during early morning exchange to see it open on its lows back at 0.8940. Today sees the release of the important Australian employment report with general market consensus forecasting the economy to have added around 20k jobs and headline unemployment to remain at an impressive 5.1%.

- We expect a range today in the AUD/USD rate of 0.8850 to 0.9000

:: Great Britain Pound: The Pound Sterling collapsed in overnight trade as investors flocked to the safety of the Greenback and Yen amidst renewed fears of risk aversion. After opening in London at around 1.5800 against the Greenback the Pound hit an overnight low of 1.5615. The market ignored better than expected employment data out of the UK preferring instead to focus on the release of the Bank of England inflation report with the central bank announcing downward revisions to CPI and signalling the possibility for the need of more emergency stimulus. The news comes on the back of a similar downbeat assessment from the U.S Federal Reserve bank on Tuesday renewing fears of a global double dip recession. This morning sees the GBP/USD exchanging at 1.5640 whilst the cross rate opens at 1.7485, up from its overnight lows around 1.7350 thanks to a large fall in the Aussie dollar.

- We expect a range today in the GBP/AUD rate of 1.7380 to 1.7500

:: New Zealand Dollar: Resistance at 0.7210 capped attempts for the Kiwi to advance higher in Asia and Europe with the NZD/USD sliding lower throughout the overnight session. The Greenback was in high demand following concerns surrounding global growth and with offshore equity markets and commodity prices falling sharply overnight “high yielders” were punished. This morning sees the NZD open on its lows at 0.7125 against the USD ahead of the release of N.Z Food Prices and Manufacturing data whilst employment data across the Tasman is also likely to have an impact on sentiment in the region, albeit a short lived one.

- We expect a range today in the NZD/USD rate of 0.7050 to 0.7180

:: Majors: Risk aversion has reappeared on the horizon over the last 24 hours with several key events changing sentiment on financial markets. In essence fears of a global double dip recession have re-emerged following the U.S Federal Reserve banks dovish statement and the Bank of England following suit last night, downgrading growth forecasts for the U.K. Add to the mix disappointing Chinese data yesterday and the result has seen EUR/JPY weaken considerably, falling almost 3% from yesterdays Asian open around 112.50 to trade as low as 109.35 overnight. Movement in the cross rate dragged EUR/USD and USD/JPY lower with the latter trading below 85 and flirting with 15 year lows around 84.75. Adding to the fears surrounding an economic slowdown was last night’s U.S Trade balance data which showed a larger than forecast 7.9 billion USD widening in the deficit to 49.9 billion. This morning sees the big dollar open well supported at 85.25 and 1.2845 against the Yen and Euro respectively.

:: Data Releases:

AUD: Jul Employment Report
NZD: Jul Food Prices & Jul Performance of Manufacturing
USD: Weekly Jobless Claims & Fedspeak
GBP: No Data Expected Today
EUR: Jun Industrial Production
JPY: Jun Industrial Production, Jul Consumer Confidence & Jun Capacity Utilisation

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Daily Forex Commentary - Wednesday, 11 Aug 2010

Tue, 10 Aug 2010 22:16:49:857 GMT

:: Australian Dollar: The Aussie dollar traded lower yesterday dropping from 0.9160 to an Asian session low of 0.9105 following a disappointing NAB Business survey and Chinese Trade data which soured sentiment towards growth in the region. The major news however driving moves on currencies overnight was the U.S Federal Reserve bank meeting and the decision to reinvest funds into long term treasuries as a means to boost spending and spur growth. By doing this the central bank is in effect keeping borrowing rates low for “an extended period of time” as it reaffirmed in its release subsequent to the conclusion of the meeting. In what was a volatile offshore session the AUD/USD fell towards 0.9050 prior to the announcement only to rally sharply back to this morning’s open of 0.9135. The local unit is expected to remain volatile with today’s release of the Australian Westpac Consumer Sentiment survey and Chinese economic data in the form of CPI, PPI, Retail Sales and Industrial Production – all key indicators of the performance for the Asian and global economy.

- We expect a range today in the AUD/USD rate of 0.9080 to 0.9200

:: Great Britain Pound: With traders squaring short USD positions heading into the FOMC meeting overnight the market ignored a better than expected U.K Trade Balance to take GBP/USD lower from late Asian levels of 1.5800 to a low around 1.5710 in Europe. It was a different story however during North American trade with the Cable reversing rapidly to gain almost 1.3% and exchange at an overnight high of 1.5905 following the U.S Central Bank meeting with it delivering a downbeat assessment on the economy and taking measures to boost growth. This morning sees the GBP open at 1.5845 and 1.7355 against the U.S and Australian dollars respectively.

- We expect a range today in the GBP/AUD rate of 1.7280 to 1.7420

:: New Zealand Dollar: After threatening to trade back above the 73 cent level in early trade yesterday the Kiwi followed the lead of the Aussie dollar lower throughout the Asian session to enter offshore trade near the 72 cent handle. The main catalysts for the move lower were some nervous USD short covering ahead of the Fed meeting and deterioration in the Chinese Trade Balance which suggests a global economic slowdown is occurring. Certainly the U.S central bank thought it ought to act in order to spur growth in North America at its meeting overnight where it announced their intention to reinvest funds into treasuries in order to keep borrowing rates low for an extended period. The news triggered a wave of Greenback weakness which saw the NZD/USD bounce back a cent from its earlier lows at 0.7165 to a high of 0.7265 before drifting slightly lower to open at 0.7235 this morning. With no N.Z data scheduled until tomorrow direction for the NZD is likely to come from the release of several key Chinese economic indicators today.

- We expect a range today in the NZD/USD rate of 0.7200 to 0.7300

:: Majors: The JPY strengthened somewhat in Asia yesterday following the conclusion of the Bank of Japan meeting and comments from the banks Governor Shirakawa who watered down concerns surrounding the effect of a strong Yen on the economy’s performance. Although they are “well aware” the recent strength in the currency poses a downside risk for “corporate sentiment” he went on to add that they have to “assess the currency’s effect on the economy in a well-balanced manner”. USD/JPY fell from an Asian high of 86.05 to exchange as low as 85.62 in early London before a massive short squeeze heading into the much anticipated FOMC meeting. The big dollar peaked at 86.23 prior to the announcement with the U.S Federal Reserve bank releasing a rather sombre statement whilst also announcing measures to boost growth for the first time since March 2009 sending the Greenback lower. Following the news the USD retreated to a low of 85.15 against the Yen whilst in exchange with the Euro it fell sharply from 1.3095 to 1.3230. Looking ahead the U.S dollar is likely to continue to trade heavily with treasury yields remaining under pressure as a consequence of the announcement to reinvest principal payments on mortgage backed securities into long term bonds.

:: Data Releases:

AUD: Aug Westpac Consumer Confidence
NZD: No Data Expected Today
USD: Jun Trade Balance & Jul Monthly Budget Statement
GBP: BoE Inflation Report, Jul Claimant Count, Jun 3mth ILO Unemployment Rate & Jul Jobless Clains Change
EUR: No Data Expected Today
JPY: Jul Machine Orders & Jul Domestic Corporate Goods Price Index
CNY: Jul CPI, Jul PPI, Jul Retail Sales & Jul Industrial Production

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Daily Forex Commentary - Tuesday, 10 Aug 2010

Mon, 09 Aug 2010 21:59:46:873 GMT

:: Australian Dollar: A larger than forecast 3.9% decline in Australian home loans during June and disappointing ANZ job advertisements data halted the progress of the Aussie dollar in Asia yesterday as it entered offshore exchange relatively unchanged from the weeks open at 0.9185. Better than expected European data saw the Greenback weaken in early London trade taking the AUD/USD back above the 92 cent handle however the move proved to be temporary as investors pared back short USD positions ahead of this evenings FOMC meeting. This morning sees the local unit open near its overnight lows at 0.9160 ahead of today’s NAB Business Confidence survey and the Bank of Japan meeting with investors keeping a close eye on developments in the USD/JPY for more direction on the Greenback and currency markets in general during the Asian session.

- We expect a range today in the AUD/USD rate of 0.9120 to 0.9220

:: Great Britain Pound: Direction for the Pound Sterling during overnight trade came from better than expected German data and movement in the Greenback. The Cable initially traded higher on the back of an early London rally in EUR/USD however resistance ahead of the 1.6 level capped any further advances for the second time since Friday night’s attempt to break through this level. This morning sees the Pound open back at 1.5900 against the Greenback with important data releases out of the UK during the second half of this week and central bank meetings in Japan and the U.S today to determine whether or not the GBP can break above the psychological 1.6 level. Against the Aussie dollar it opens at 1.7350 after having traded in an overnight range between 1.7320 and 1.7430.

- We expect a range today in the GBP/AUD rate of 1.7300 to 1.7450

:: New Zealand Dollar: After opening the weeks trade on its highs around 0.7330 yesterday the Kiwi drifted lower to exchange at an overnight low of 0.7270 against the Greenback and opens this morning at 0.7285. With only second tier N.Z data releases early in the week the NZD/USD fortunes in the near term rest heavily on developments in the U.S as markets remain on tenterhooks ahead of this evenings Federal Reserve Bank meeting. The Greenback has weakened considerably in recent weeks as economic data in North America continues to print below forecasts and the expectations building that the central bank will need to embark on quantitative easing in order to spur demand. The big dollar has fallen against most majors with the NZD being one of the beneficiaries of the move. There are some risks for the Kiwi on the horizon however with the possibility of a correction to the USD weakness later in the week as Retail Sales, Inflation and Consumer Sentiment data out of North America is released.

- We expect a range today in the NZD/USD rate of 0.7225 to 0.7325

:: Majors: After threatening to break below the 85 level and trade to 15 year lows on Friday night the USD/JPY staged a recovery on Monday to open this morning on its highs at 85.90. Comments from the Japanese Finance Minister Noda who warned against the economic impact of a strong yen coupled with the release of a lower than expected trade balance out of Japan weakened the JPY ahead of today’s BOJ meeting. Although the central bank is not expected to move on interest rates the market will be eyeing the ensuing press conference for more rhetoric surrounding “undesirable” exchange rate fluctuations and the possibility of intervention at some point. In Asia today the USD/JPY is likely to continue to squeeze higher as speculators square up short USD/JPY positions heading into this evenings much anticipated U.S Federal Reserve Bank meeting. The likelihood of an announcement of any quantitative easing has diminished somewhat however it is likely that the Fed will announce some downward revisions to GDP and deliver a more sombre assessment of the economy which could be enough to cap any further attempts at a rally in the USD/JPY between 86.50 and 87.00 over the next 24 hours. The big dollar also opens higher at 1.3225 against the Euro bouncing back after dropping to 1.3308 following the announcement of an improvement in the German Trade Balance and the Sentix Investor Confidence survey.

:: Data Releases:

AUD: Jul NAB Business Confidence
NZD: No Data Expected Today
USD: FOMC Meeting
GBP: Jun Trade Balance
EUR: German Jul Forecast CPI
JPY: BoJ Meeting & Q2 Housing Loans

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Daily Forex Commentary - Monday, 09 Aug 2010

Sun, 08 Aug 2010 22:14:28:187 GMT

:: Australian Dollar: Friday’s release of the RBA Monetary Policy statement swayed little from the recent central bank rhetoric with a relatively neutral document. In local trade the Aussie dollar traded sideways between 0.9135 and 0.9155 for the majority of the day but came to life in offshore exchange peaking above the 92 cent handle before finishing the week marginally below the big figure at 0.9190. Broad based USD selling following a disappointing employment report out of North America was the main catalyst for the move with the week ahead likely to see more downside pressure applied to the Greenback following the bleak outlook for the U.S economy. In Australia today we see the release of ANZ job advertisements and home loan data with the main local attraction this week being Thursday’s official employment report.

- We expect a range today in the AUD/USD rate of 0.9150 to 0.9250

:: Great Britain Pound: The Pound Sterling bounced back from an early London sell off to 1.5835 following lower than forecast July Manufacturing and PPI data to trade within a whisker of the psychological 1.6 level against the Greenback. Despite the initial negative reaction to the U.K news USD selling after the announcement of poor non-farm payroll data stateside spurred demand for Pounds. This morning sees the GBP open at 1.5985 and 1.7385 against the U.S and Australian dollars respectively.

- We expect a range today in the GBP/AUD rate of 1.7300 to 1.7480

:: New Zealand Dollar: In what was a very volatile finish to the week the Kiwi rallied from 0.7280 to 0.7345 with the U.S employment report disappointing the market. The non-farm sector shed a larger than forecast 131k jobs in July triggering USD selling across the majors. The first half of the week ahead is very light on the N.Z economic calendar front so moves on the currency are likely to be dictated by developments in the U.S with the FOMC meeting on Tuesday. On the domestic front the major release comes late in the week in the form of Friday’s Retail Sales report.

- We expect a range today in the NZD/USD rate of 0.7285 to 0.7385

:: Majors: A drop in German Industrial production fell 0.6% in June, well below forecasts for gains of around 0.5% dragging the Euro lower during early offshore trade on Friday. EUR/USD drifted down from 1.3205 to hit a low of 1.3155 however the markets were focused on the U.S jobs report with the Euro holding firm at 1.3180 ahead of the release. The announcement triggered a wave of USD selling pushing EUR/USD back above 1.33 for the first time since the 3rd of May and USD/JPY down to test the all important 85 level for the first time since November 2009. The Non-Farm payrolls report showed the loss of 131k jobs in July, more than double economist forecasts for a loss of around 65k with the unemployment rate which measures the percentage of those actively seeking work holding steady at 9.5%. With the U.S Federal Reserve bank meeting this week the market will be closely scrutinising the central banks accompanying statement for the announcement of any measures aimed at curbing the economic downturn and spurring growth in the region.

:: Data Releases:

AUD: Jun Home Loans, Jun Investment Lending & Jul ANZ Job Ads
NZD: No Data Expected Today
USD: No Data Expected Today
GBP: No Data Expected Today
EUR: Jun German Trade Balance & Aug Euro-Zone Sentix Investor Confidence
JPY: Jun Current Account & Jun Trade Balance

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Daily Forex Commentary - Friday, 06 Aug 2010

Thu, 05 Aug 2010 22:54:37:230 GMT

:: Australian Dollar: Demand for higher yielding assets dampened on concern China’s bank stress tests will reveal losses, softening the Australian Dollar during Asia. The Aussie traded mostly between 0.9130 – 0.9160 against the US Dollar before falling from a near-three-month high against the greenback as a drop in U.S. stocks discouraged demand for currencies related to economic growth. The number of Americans filing for unemployment benefits unexpectedly rose, intensifying speculation the Federal Reserve will introduce stimulus measures next week at its next policy meeting. The news sent the Aussie down to an intra-day low of 0.9115 US. The Australian Dollar opens this morning firmer at 0.9150 US ahead of today’s RBA monetary policy statement.

- We expect a range today in the AUD/USD rate of 0.9120 to 0.9175

:: Great Britain Pound: Sterling opens lower for the third day against the Greenback at 1.5886. The Bank of England’s decision to keep interest rates at a record low weakened the Pound against the Greenback. Committee members voted to keep key interest rates at 0.5%, a position they have maintained since March 2009.The gathered committee also voted not to modify the stocks of asset purchases, currently at £200 billion. The British currency climbed to 1.5923 against the big dollar in the lead up to the central bank’s official cash rate announcement. The Cable retreated towards 1.5820 from its intra-day high losing strength amid a decline in stocks in Wall Street as US continuing jobless claims exceeded estimates. Meanwhile the Pound opens lower against the Aussie at 1.7360 and 2.1777 against the Kiwi.

- We expect a range today in the GBP/AUD rate of 1.7315 to 1.7380

:: New Zealand Dollar: This morning the Kiwi opens buying 0.7294 US Dollars. The Kiwi sank 0.8% to 0.7274 US immediately following worse-than-expected unemployment figures. New Zealand’s unemployment rate surged back to a 10 year high jumping to 6.8% in the second quarter. Economists has expected jobless rates to increase to 6.4% after is biggest decline last quarter. The surprisingly large figure added to evidence New Zealand’s economic recovery is losing momentum and will put pressure on the RBNZ to stop increasing interest rates. Overnight the Kiwi slumped to 0.7246 against the US Dollar following disappointing US jobless reports.

- We expect a range today in the NZD/USD rate of 0.7290 to 0.7340

:: Majors: The US Dollar slumped towards 8 month lows against the Japanese Yen as jobless claims climbed by 19,000 to 479,000 in July. The increase in unemployment claims was a surprise with most expecting a decline to 456,000. The report intensified speculation the Federal Reserve will introduce stimulus measures next week at its next policy meeting sending the USD down to 85.70 against the Yen as traders turned to the safety of the Japanese currency. The Euro was firmer against the Greenback after falling as low as 1.3121 versus the US Dollar, late in Asian trade. Ahead of the European Central Bank’s rate decision the Euro advanced to 1.3220 US. ECB President Jean Claude Trichet reiterating his message that monetary policy remains appropriate. With nothing new to offer, Trichet’s comments sent the Euro below 1.3200 US.

:: Data Releases:

AUD: RBA Quarterly Monetary Policy Statement
CAD: Employment Rate, July
EUR: German Industrial Production, July
GBP: NIESR GDP Estimate, July
JPY: Leading Index, June
NZD: No Data Today
USD: Non Farm Payrolls, Unemployment Rate, July

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Daily Forex Commentary - Thursday, 05 Aug 2010

Wed, 04 Aug 2010 22:52:06:750 GMT

:: Australian Dollar: The Australian goods and services balance printed a trade surplus of 3.54 billion in June annihilating expectations of 1.81 billion. The massive surplus was driven by growth in exports as Chinese demand spurred exports of coal and iron ore while imports remained more conservative. This was the biggest trade surplus on record and the third positive number in a row. Housing prices also grew beyond expectations indicating that Australian economic growth remains robust pushing the Aussie to 0.9145 US. Offshore, better-than-expected US data improved market sentiment prompting investors to continue buying the Aussie. Demand saw the Australian Dollar again setting new 3 month highs at 0.9180 against the Big Dollar. This morning the Aussie starts the day buying 0.9165 US.

- We expect a range today in the AUD/USD rate of 0.9120 to 0.9190

:: Great Britain Pound: The Pound’s 9 day winning streak against the Greenback broke after a report showed U.K. services growth slowed to the lowest in 13 months in July. The index was 53.1 in July, dropping from June''s 54.4 and falling short of the 54.5 estimate. The Sterling dipped to 1.5891 early offshore before recovering to 1.5960 US following Lloyds Banking Group Plc, Britain’s largest mortgage lender, reporting a profit for the first time since its acquisition of HBOS Plc. The US Dollar soon snapped back the gains after the ADP employment change showed 42,000 new jobs and the ISM services gauge grew at a faster pace than forecast. The Pound opens weaker today buying 1.5888 US, 1.7328 Aussie and 2.1614 Kiwi.

- We expect a range today in the GBP/AUD rate of 1.7300 to 1.7360

:: New Zealand Dollar: Following Australia’s massive trade surplus figures the Kiwi broke 0.7350 US as it followed its trans-Tasman rival higher throughout the local session. Moving offshore the Kiwi slumped below 0.7300 US after Asian stocks declined, damping investor appetite for the South Pacific nations’ assets early in the evening. Figures from the US provided support for the New Zealand Dollar with US report growth in jobs and services sector. The Kiwi opens at 0.7340 versus the US Dollar ahead of today’s Kiwi unemployment data. On the cross rates, the kiwi opens today a shade above 0.8000.

- We expect a range today in the NZD/USD rate of 0.7310 to 0.7375

:: Majors: The big dollar hit fresh 8 month lows reaching 85.33 against the Japanese Yen on speculation the Fed will take further quantitative easing measures following growing evidence of a slowing US economy. While lower yields reduce the government’s borrowing costs, “excessive currency movements are undesirable and can have a negative impact on the stability of the economy and finance” said Japanese Finance Minister Yoshihiko Noda. ‘[He] will continue to monitor developments in markets more carefully’ as the Dollar/Yen edged lower offshore. Meanwhile, retail sales across the EMU remained flat in June while the annual grew 0.4% exceeding expectations. The aftermath spurred the Euro to an overnight high of1.3230 against the Greenback. The Dollar gained for the first time in 3 days versus the Euro sending it down to 1.3130 after reports showed the U.S. added more workers and service industries grew faster in July than forecasted.

:: Data Releases:

AUD: RBA Quarterly Monetary Policy Statement
CAD: Building Permits, June
EUR: German Factory Orders, June
GBP: Bank of England Rates decision
JPY: No Data Today
NZD: Unemployment rate, Q2
USD: Initial jobless claims, W/E July 31

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Daily Forex Commentary - Wednesday, 04 Aug 2010

Tue, 03 Aug 2010 22:49:08:367 GMT

:: Australian Dollar: The Australian Dollar fell below 0.9100 US earlier in the day following an unexpected decline of -3.3% in June building approvals. Expectations had been for an increase of approximately 2.1%. Australian retail sales also disappointed printing below estimates of 0.4%, increasing only 0.2%. As expected the RBA kept the official cash rate unchanged. A statement from the RBA indicated the reserve bank may take a more neutral stance in the foreseeable future ‘with growth likely to be close to trend, inflation close to target and the global outlook remaining somewhat uncertain’ further weakened the Aussie. Moving offshore the Aussie erased its losses creating a new 3month high at 0.9150 US after another round of subpar US economic data encouraged investors to dump the Greenback. This morning the Aussie opens at 0.9131 against the US Dollar.

- We expect a range today in the AUD/USD rate of 0.9075 to 0.9150

:: Great Britain Pound: The Pound rose against the Big Dollar for the ninth consecutive day piercing 1.5960 overnight. Northern Rock reported its first profit boosting sentiment in the UK financial system giving investors the confidence for stronger Sterling trade despite a significant decline in the nation’s construction sector. Given that the British economy is showing signs of recovery former Bank of England Deputy Governor John Gieve commented policy makers shouldn’t loosen monetary policy further or increase stimulus measures. This morning the Pound is buying 1.5945 US, 1.7465 Aussie and 2.1740 Kiwi.

- We expect a range today in the GBP/AUD rate of 1.7350 to 1.7550

:: New Zealand Dollar: The Kiwi dipped near 0.7300 following Australia’s interest rate announcement. The neutral tones from the RBA indicated rates may hold at 4.25% while Australia’s growth remains ‘on trend’. The Kiwi fell below 0.7300 late in Asia before recovering offshore. Positive news from the UK wetted investor risk appetite for growth currency as investors turned away from the US haven amid growing evidence of a failing US economy. The Kiwi opens this morning at 07330 against the Greenback.

- We expect a range today in the NZD/USD rate of 0.7275 to 0.7375

:: Majors: The Japanese Yen strengthen overnight to an 8 month high against the Greenback over concerns the Fed may be considering another round monetary stimulus to boost the frail US economy. The Big Dollar was sent down to 85.66 Yen, the lowest level since November 27th. Japanese Finance Minister Noda expressed little opposition to the current price action noting exchange rates should in principle be set by the market. Meanwhile US pending home sales dropped 2.6 percent in June while personal income and spending remained stagnant. The impact of fresh concerns for the US helped push the Euro higher despite European PPI falling short of expectations.

:: Data Releases:

AUD: Trade Balance
CAD: No data slated for release
EUR: Retail Sales; Final Services PMI
GBP: Halifax HPI
JPY: No data slated for release
NZD: No data slated for release
USD: ADP Non Farm Empolyment Change; Challenger Job Cuts

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Daily Forex Commentary - Tuesday, 03 Aug 2010

Mon, 02 Aug 2010 22:53:50:170 GMT

:: Australian Dollar: The Australian Dollar continues to benefit from a weaker greenback and opens this morning buying 0.9136. Hitting a 3 month high overnight, the Aussie rallied to 0.9145 against the Greenback as investors shrugged off weaker Chinese PMI data. Investors remained bullish following better than expected manufacturing figures in the Euro zone overnight. Although it was revealed yesterday that Australian PMI expanded to 54.4 in July from 52.9, new home sales were reported to be in the red falling -5.1%. The RBA is expected to keep interest rates steady at 4.25% in today’s meeting.

- We expect a range today in the AUD/USD rate of 0.9100 to 0.9175

:: Great Britain Pound: The Pound reached a 6 month high overnight against the US Dollar breaking above 1.5900 following signs the UK economy is recovering. British PMI expanded for the 10th month in a row printing above expectations of 57.1 coming in at 57.3 for July. Consistent upside surprises and rising UK equities led by gains in BHP Billiton and strong earnings from HSBC fuelled the aggressive rally as risk appetite improved throughout the evening. This morning the Sterling opens at 1.5890 US while buying 1.7400 Aussie and 2.1700 Kiwi.

- We expect a range today in the GBP/AUD rate of 1.7390 to 1.7440

:: New Zealand Dollar: The New Zealand Dollar benefitted from yesterday’s potent rally in risk making several attempts to break 0.7340. Appetite for the NZ dollar continued throughout the evening as relatively positive economic data from the US and the UK, and better than expected earnings announcements, lifted market sentiment. According to a Treasury report, exports to China and Australia and commodity prices are off-setting the nation’s weak consumer spending and housing demand keeping the Kiwi afloat. This morning the Kiwi opens buying 0.7320 US Dollars. Meanwhile, the Kiwi is steady against the Australian Dollar at 0.8015.

- We expect a range today in the NZD/USD rate of 0.7290 to 0.7345

:: Majors: Offshore, European manufacturing PMI improved 0.2 index points from a previous reading of 55.6 to the current 56.7, leaping over market expectations at 56.5. The news ignited a risk rally which sent the Euro to a 3 month high, barely missing the 1.32 US mark, as more positive news flowed from the US. Better than expected corporate earnings and manufacturing figures from the US drew less pessimistic comments from Fed Chairman Bernanke dampening demand for haven currencies. The Euro opened this morning steady at 1.3172 against the US Dollar. Meanwhile, the big dollar has moved away from recent 8-month lows and opens in Sydney at 86.40.

:: Data Releases:

AUD: Building Approvals, Retail Sales, June; RBA Interest Rate Decision
CAD: No Data Today
EUR: EZ PPI, June
GBP: Halifax House Prices, PMI Construction, July
JPY: No Data Today
NZD: Average Hourly Earnings, Q2
USD: Personal Consumption Expenditure, June

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Daily Forex Commentary - Monday, 02 Aug 2010

Sun, 01 Aug 2010 21:19:13:127 GMT

:: Australian Dollar: Greenback weakness across the board has helped put the Australian Dollar back over US90 cents during offshore trade on Friday and we open in Sydney this morning at 0.9050. The Aussie hit a 24-hour zenith of 0.9066 - just shy of a three-month high - after U.S. second quarter economic growth came in at 2.4 per cent. Soft data and high unemployment in the United States is taking its toll on the greenback, pushing the pound, Aussie, Euro and Yen to multi-month highs. Strong commodities and base metals prices are also supporting the local unit at the moment. Tomorrow, the Reserve Bank of Australia (RBA) meets to discuss monetary policy and rates are expected to remain on hold at 4.50 per cent. As usual, the market will be looking closely at the RBA's accompanying statement and if there is any hint of rates being at an "appropriate setting", the Aussie may come under pressure.

- We expect a range today in the AUD/USD rate of 0.9010 to 0.9080

:: Great Britain Pound: Greenback weakness across the board has helped to push the pound to fresh five-month highs which sees the currency open the new week at 1.5700. In the absence of any local economic data on Friday the pound hit a high of 1.5721 after news across the Atlantic revealed that U.S. economic growth had slowed to 2.4 per cent annual pace. It is likely to be a volatile week for Sterling with the Bank of England set to announce a decision on interest rates this Thursday. Rates are widely tipped to remain on hold at 0.50 per cent. Meanwhile, the pound opens higher against both the Australian Dollar (1.7350) and the New Zealand Dollar (2.1630).

- We expect a range today in the GBP/AUD rate of 1.7320 to 1.7380

:: New Zealand Dollar: The New Zealand Dollar opens higher against its U.S. counterpart on Monday at 0.7260. Despite the Reserve Bank of New Zealand recently hosing down the prospects of a series further moves in interest rates, the kiwi has been well supported after last weeks strong terms of trade result. Stronger commodities and a weak greenback are also underpinning the currency. During Fridays offshore session, the unit hit a 24-hour high of 0.7267 after U.S. economic growth came in weaker than expected pushing the greenback lower across the board. Despite the recent surge however, the kiwi is being outperformed by the Australian Dollar at the moment and opens today 0.8010.

- We expect a range today in the NZD/USD rate of 0.7220 to 0.7295

:: Majors: The big dollar moved beneath 86.00 against the Japanese Yen for the first time this calendar year after U.S. economic growth slowed in the second quarter. The greenback has lost 11 per cent on the Yen this year and hit an overnight low of 85.93 as a string of weak U.S. economic data releases continue to point to a very slow recovery and a sustained period of near-zero per cent interest rates. Gross domestic product came in at 2.4 per cent annual pace which was below most forecasts. Traders are now favouring investments in Japanese yen and Swiss francs. Meanwhile, the Euro opens stronger today at 1.3060 after hitting an overnight high of 1.3093 - just short of a three-month peak. The 16-nation currency has advanced more than 6 per cent over the last month as concerns have eased that the regions sovereign debt crisis would worsen and dampen global economic growth.

:: Data Releases:

AUD: Bank Holiday, NSW
CAD: No Data Today
EUR: EZ Purchasing Managers Index, July
GBP: Purchasing Managers Index, July
JPY: Vehicle Sales, July
NZD: ANZ Commodity Price, July
USD: ISM Manufacturing, July

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