Daily Dollar Forecast 09/11/2012
Australian Dollar
Hurting the credentials of the Australian dollar yesterday the number of home loans in July fell 1 percent, suggesting the housing market is moving sideways. With signs of weakness locally disappointing Trade Balance figures in China also did little to support the higher-yielding asset which fell to overnight an low of 1.0332 against US Counterpart, well short of the highs around 1.04 witnessed late last week. Meanwhile whilst on China, exports which comprise of 25 percent of the Nations GDP grew a mere 2.7 percent y/y last month, well below the double digit growth figures we have become accustomed to over much of the past decade. In what was an overall bearish day for the Aussie, the local unit opens 0.3% lower this morning currently swapping hands at 1.0330
We expect a range today of 1.0280 - 1.0380
New Zealand Dollar
Markets have shed risk for much of the past 24 hours as concerns over Greece’s ability to meet strict spending cuts, required in order to receive further aid mounted. Receiving little support from a disappointing Trade Balance read in China all signs were pointed lower for the New Zealand dollar which managed to shed around half a cent from its earlier highs of 0.8133 against its US Counterpart. Given we are now only a day away from the all important German Constitutional Court ruling which is set to rule on the validity of the ESM, anything but an approval from the High Court is likely to see a downward shift across all asset classes. Meanwhile this morning in what is shaping up as a volatile 48 hour window the Kiwi currently buys 80.78 US Cents.
We expect a range today of 0.8040 – 0.8120
Great British Pound:
UK’s stocks followed a handful of the major indexes lower yesterday after a report showed China’s imports grew at a disappointing pace of 2.7 percent in August from a year earlier whilst Industrial Production figures also showed signs of weakness. Highlighting the importance of China in the overall global growth story, in the absence of world’s second largest economy remaining the driving force, the question must be asked, who do we look to for growth?.Given the level of uncertainty around markets of late, the picture is likely to become a little clearer over the coming days with key decisions out of Germany and the US Fed likely to have profound implications. Meanwhile in currency movements, the Sterling after touching an an overnight low of 1.5958 against its US Counterpart opens weaker against both the Greenback (1.5986) and the Aussie (1.5468)
We expect a range today of 1.5420 – 1.5500
Majors:
Global Stocks retreated overnight as concerns over Greece’s debt crisis overshadowed the continued hope that the US Federal Reserve will announce new Stimulus measures when they next meet this coming Thursday. Dragging the S&P 500 lower by 0.6 percent, the governing partners of Greek PM Antonis Samaras have reportedly rejected the strict spending cuts required in order for the Nation to receive further aid. As well as Greece’s battles, the week of activity ahead is shaping as one which may have lasting implications for the broader euro-zone in particular the German Constitutional Court decision which will rule on the legality of the ESM and the proposed Euro rescue fund. On the currency front, ranging between (1.2755 – 1.2810) against its US Counterpart for much of the past 24 hours, the Euro opens this morning broadly weaker at 1.2757 whilst the Greenback remained stagnant against the Japanese Yen opening a very similar level to where we left it at 78.25.
Data releases
AUD:
NAB Business Confidence
NZD: REINZ HPI m/m
JPY:
BSI Manufacturing Index
GBP: Trade Balance
EUR:
German WPI m/m
USD:
Trade Balance