Daily Forex Commentary 14/9/2010

:: Australian Dollar: The Australian Dollar has more momentum than the Canberra Raiders holding onto its recent gains above US93 cents during local trade on Monday. It opens at 0.9350 today. Investors were keen to buy any dips in the unit and headed into the European session around 0.9320 - a fresh four-month high. Better than expected local and Chinese economic data releases in recent days have helped underpin the currency. During the offshore session the Aussie moved between a low of 0.9320 up to a high of 0.9361. The Aussie also remains strong against the Euro (0.7260) and the British Pound (0.6060).

- We expect a range today in the AUD/USD rate of 0.9320 to 0.9380

:: Great Britain Pound: Pound Sterling opens marginally higher against the greenback at 1.5420. Despite a renewed wave of positive risk sentiment and a weaker big dollar, the pound is being hamstrung by low domestic interest rates and forthcoming fiscal austerity measures dimming growth prospects. In the absence of any economic data releases overnight, the pound traded between 1.5349 and 1.5488. Meanwhile, the pound remains weak against both the Australian Dollar (1.6480) and the New Zealand Dollar (2.1010).

- We expect a range today in the GBP/AUD rate of 1.6440 to 1.6515

:: New Zealand Dollar: The New Zealand Dollar opens higher against the greenback at 0.7335. The kiwi hit a fresh one-month peak during local trade yesterday above 0.7340 and is being supported by strong commodity prices and renewed risk sentiment amongst investors. Overnight, the kiwi moved between 0.7300 and 0.7344. Further gains are expected to be limited over the next couple of sessions in the lead-up to Thursday''s monetary policy statement by the Reserve Bank of New Zealand. Most economists expect interest rates to remain on hold at 3 per cent.

- We expect a range today in the NZD/USD rate of 0.7300 to 0.7360

:: Majors: The Euro (1.2878) rose sharply against the dollar overnight after European banking regulators gave financial institutions more time than analysts expected to meet capital requirements. In overnight trade, the Euro moved from a low of 1.2702 to a high of 1.2891 - its biggest one-day rise in two months. The 16-nation currency was also aided after the European Commission said the region's economy may exceed previous growth forecasts. Meanwhile, the Japanese Yen (83.67) weakened as stronger than expected industrial production data from China on the weekend added to signs the global economy is gaining momentum, reducing safe haven demand.

:: Data Releases: