Daily Forex Commentary 20/7/2010

:: Australian Dollar: The Australian Dollar opens marginally higher against the greenback this morning at 0.8675. The Aussie spent most of Monday's domestic session tracking sentiment on equity markets falling to an intraday low of 0.8632 - a level not seen in almost two weeks. In the absence of any local data yesterday, volumes were kept to a minimum. During overnight trade, the unit moved between a high in early European trade of 0.8710 down to a low of 0.8660. Today sees the release of the Reserve Bank July board meeting minutes which may provide some clues to the market regarding the possibility of a pre-election interest rate rise.

- We expect a range today in the AUD/USD rate of 0.8635 to 0.8720

:: Great Britain Pound: Pound Sterling opens marginally lower against its US counterpart on Tuesday at 1.5230. In the absence of any local economic data and a lack-lustre session on equity markets, traders were content to "play the ranges" between 1.5200 and the overnight high of 1.5351. Last week the pound hit a 3-month high at 1.5400. Markets are also awaiting the all-important release this Thursday of June retail sales which is tipped to come in lower than the previous month. Meanwhile, the pound opens lower against the Australian Dollar (1.7530) and steady against the New Zealand Dollar (2.1570).

- We expect a range today in the GBP/AUD rate of 1.7480 to 1.7575

:: New Zealand Dollar: The kiwi's recent speculative foray towards the 11-week highs around US73 cents proved fleeting after softer-than-expected local economic data announced last week was still being digested by the market. With question marks over global growth, risk-aversion has returned pushing the currency down towards 0.7030 during Monday's domestic session as investors sold the kiwi in exchange for the Aussie. The NZD/AUD cross rate moved beneath 0.8150 and opens today at 0.8123. Against the greenback, the New Zealand Dollar opens at this morning at 0.7050.

- We expect a range today in the NZD/USD rate of 0.7040 to 0.7105

:: Majors: The Euro opens higher against the greenback today at 1.2940. As equity markets in the United Kingdom and the U.S. lacked direction ahead of several key profit announcements later in the week, so too did currency markets. The 16-nation currency traded between a low of 1.2870 before nudging 2-month highs just beneath 1.3000. Whilst steady across the board, the greenback was not aided by the release overnight of a private sector measure of the U.S. housing market which came in at a 14-month low. Meanwhile, the big dollar opens largely unchanged against the Japanese Yen at 86.70 after a public holiday in Tokyo kept volumes to a minimum.

:: Data Releases: