Daily Forex Commentary 11/10/2010

:: Australian Dollar: Despite a brief run lower during Friday''s offshore session towards US97 cents, the Australian Dollar has rallied for an eighth consecutive week and opens today at 0.9880. As quantitative easing looms in the United States, the greenback continues to weaken across the board which has been of particular benefit to high-yielding currencies such as the Aussie. Stronger commodities and base metals prices are also underpinning the local unit. As parity with the greenback looms large, the Aussie also remains strong on the cross rates opening at 0.7060 versus the Euro and 0.6200 against the British Pound.

- We expect a range today in the AUD/USD rate of 0.9830 to 0.9920

:: Great Britain Pound: Pound Sterling opens higher today at 1.5930 as the greenback continues its recent slide against several major currencies. Sterling hit an overnight low of 1.5823 after the National Institute of Economic and Social Research in its monthly publication estimated the pace of growth in the UK may have slowed to just 0.5 per cent in the September quarter. However, weak employment data in the US pushed the greenback lower and the pound to an overnight high of 1.5964. Meanwhile, the pound opens lower against both the Australian Dollar (1.6110) and the New Zealand Dollar (2.1070).

- We expect a range today in the GBP/AUD rate of 1.6100 to 1.6155

:: New Zealand Dollar: The kiwi opens stronger today (0.7560) and has consolidated upon its recent gains around the US75 cent area. US employment data released on Friday night did nothing to eliminate the prospect of further quantitative easing which continues to weaken the greenback across the board. Despite a brief run lower offshore on Friday down towards US74 cents, the kiwi rallied sharply hitting a high of 0.7550. The local economic calendar is light today and the currency is likely to be supported by strong commodity prices.

- We expect a range today in the NZD/USD rate of 0.7520 to 0.7600

:: Majors: The big dollar opens weaker against the Euro (1.3980) and Japanese Yen (81.91) as worse-than-expected US jobs data fuelled speculation the Federal Reserve will buy more debt. The US unemployment rate remains at 9.6 per cent after employers shed 95,000 workers during September. The greenback weakened across the board and even with the 16-nation euro at these high levels, traders to continued to sell dollars as a second round of quantitative easing looms. Meanwhile, the US Dollar hit a 15-year low against the Yen on Friday of 81.71.

:: Data Releases: