Australian Dollar Outlook 6/3/2011
Australia: Reassuring news out of Europe on the Greece debt crisis also helped the AUD gain a little ground towards the USD1.0700 level. Yesterday's stronger than expected Australian Retail Sales figures failed to have much of an impact on the AUD; instead the local currency remained confined to overnight ranges, finding it difficult to rally past USD1.0650. Concerns over global growth continued to limit the AUD gains overnight, despite the good news out of Europe and this is likely to continue during today's trading session, ahead of US Non-farm payrolls tonight. If we see a weak number tonight this could push the AUD back through USD1.0700, however investor risk appetite may limit its gainsabove this level.
Majors: It was a fairly quiet session for financial markets overnight with the USD lower against most of the major currencies. The EUR rallied following optimistic reports about the Greek debt restructuring plan and its efforts to avoid default. Euro-zone governments are likely to accept Germany's demands that Greece's private sector creditors contribute to fill the country's financing gap over the next three years. Combined with expected austerity and privatization measures, investors are hoping Greece will avoid the debt restructuring many have feared. Today is the final day of talks between the IMF/EU/ECB and Greece so investors are hoping to hear something relatively soon. After a few session of weaker than expected data, the US is bracing itself for tonight's Non-farm payrolls report. Many believe the figure is going to be weak following Wednesday night's ADP data which showed the US private sector had only added 38,000 jobs in May. The market is expecting tonight's data to show 165,000 jobs to of been added for the month of May.