Daily Dollar Forecast 08/10/2012
Australian Dollar
The Australian was lifted higher yesterday after a robust jobs report showed Australian employers added 14 000 jobs in July. comfortably beating expectation. With the underlying Unemployment rate dropping from 5.3 percent to 5.2 percent investors took the opportunity to buy the higher yielding asset taking it to a 4 -1/2 month high of 1.0612 against its US Counterpart. Despite a string of softer than expected data releases out of China which has provided further evidence that growth in the world’s second largest economy is slowing the Aussie Dollar has done well to consolidate gains overnight as we open this morning around 20 basis points stronger than the same time yesterday at 1.0581. Looking ahead this evening support has been well established above the 1.05 handle this week with a push higher in the short-term not likely unless we see opening levels above its recent highs of around 1.0610.
We expect a range today of 1.0540 - 1.0610
New Zealand Dollar
New Zealand’s unemployment rate unexpectedly rose 0.1 of a percentage point yesterday as the underlying rate spiked to 6.8 percent. In what came as a surprise to the majority of investors the New Zealand dollar was immediately sold off in early morning trade, reaching a low of 0.8097 against its US Counterpart. Failing to find any real support as US Markets entered the frame Chinese Industrial Production figures as well as underlying inflationary readings also managed to dash hopes that the world’s second largest economy is likely to accelerate its rate of expansion. Meanwhile this morning following a not so successful day for the Kiwi, the riskier backed asset opens around 40 basis points weaker currently buying 81.18 US Cents.
We expect a range today of 0.8070 – 0.8160
Great British Pound:
Having an overall negative impact on the Great British Pound, Britain’s Trade Balance widened to a record in the second quarter of this year. Highlighting the lack of growth throughout both the UK and broader Europe, demand for Britain’s exports fell by a staggering 4.9 percent. Following the release the Sterling fell to an overnight low of 1.5604 against the Greenback opening overall weaker this morning at 1.5629. Whilst the Bank of England cut its growth forecasts earlier in the week potential flare-ups throughout Europe are likely to keep a lid on the Sterling at least over the coming weeks. Meanwhile the Sterling opens weaker also against both the Aussie (1.4770) and the Kiwi (1.9256).
We expect a range today of 1.4730 – 1.4810
Majors:
In what has become a familiar trend this week investors continued to hold out hope than global central banks, specifically the ECB and the FED will add stimulus when they next meet in September. In an awkward move by investors, markets have continued to strengthen in the wake of a string as disappointing fundamental readings as Stimulus speculation outweighs any clear signs of economic growth. Whilst sentiment and reality may not be currently aligned risk sentiment remains intact with many riskier backed purchases being funded by sales of the Euro. Trading to an overnight low of 1.2266 the Shared-unit opens this morning noticeably weaker at 1.2305. Whilst there is a general fear that hope from the ECB’s last meeting is slowly wearing thin, US Jobless Claims offered a bright note overnight, unexpectedly falling by 6000 to 361 000. With the US Trade deficit also narrowing more than forecast the Dollar rallied as it opens stronger against the Japanese Yen at 78.558.
Data releases
AUD:
RBA Monetary Policy Statement
NZD: No data today
JPY:
CGPI y/y, Revised Industrial Production m/m, BOJ Monthly Report
GBP: PPI Input m/m
EUR:
French Industrial Production m/m, French Gov Budget Balance
USD:
Federal Budget Balance