Australian Dollar Outlook 15/10/2010
Australia: The Australian Dollar traded to another new high overnight of USD0.9990 before falling victim to some profit taking, with the currency pair back to around USD0.9900 this morning.
It seems that it's almost a certainty that the AUD will trade to parity with the Greenback; with most investors just waiting to see when exactly that will happen.
With some important US data due out tonight, including Retail Sales and CPI for September, it's possible that if we see some weak results, it could be the catalyst to hit that illusive USD1.0000.
Yesterday the Australian Consumer Inflation expectations rose to 3.8% in October up from 3.1% in September.
Base metals where mixed overnight with copper up 0.4% nickel down 0.4% and zinc up 0.1%.
Gold continues to trade higher on the back of a weaker US dollar and currently trading at US$1380.00 per ounce.
Most major currencies have benefited over the past few months as investors decrease their holdings of the US dollar with the expectations that the Federal Reserve will announce further quantitative easing at its next meeting.
There is no key local data due for release today, but we should see the AUD be driven by offshore moves and remain fairly firm during the localsession.
Majors: US equity markets finished slightly lower overnight, following some weaker than expected data releases.
The Dow finished the session down 0.1%, the S&P down 0.4% and the Nasdaq also weaker down 0.2%. Google reported after the closing bell that net income jumped 32%, with earning up for the 3Q ahead of expectations. T
he US initial jobless claims reported last night posted rise of 13,000 to 462,000, which was worse than market expectations; while the US trade deficit widened to $46.3bn in August from a revised $42.6bn in July.
A mentioned above, a busy night ahead in the US with plenty of data due for release, along with Ben Bernanke's speech on "Monetary Policy Objectives and Tools in Low-Inflation Environment".
The speech by Ben Bernanke will be closely watched for any hints on what the US central bank might do at its next policy meeting on November 2-3.