Daily Forex Forecast 01/04/2011
Australian Dollar: The Australian Dollar has risen for the 10th straight day and reached new highs overnight as commodities continue to rise and retail sales rose more than expected. Surveyed economists had predicted a 0.4% increase, the same as the previous month, however a 0.5% increase surprised the markets and the Aussie pushed 50 points higher on the news and fell just shy of 1.0350.
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Private sector credit also rose, although building approvals slumped by 7.4% and this contributed to a post-rally fall back to 1.0312. Offshore markets saw another surge in commodities and as oil raced towards $107.00 per barrel, the Aussie yet again reached fresh post-1983 highs near 1.0370. Strong sell orders appear to have taken effect at this level and we open this morning lower at 1.0330 where focus shifts back to the Asian economies, namely Chinese and Japanese manufacturing reports due today.
We expect a range today of 1.0280 - 1.0360
New Zealand Dollar: As Oil and Gold prices continue to soar, the New Zealand dollar appears to have consolidated above 76 cents for the time being. A drop in Business Confidence momentarily stopped the Kiwi's rally and pushed it back down to 0.7585 against the Greenback although it bounced straight back to push to overnight highs of 0.7645. A fall from these highs sees the pair back down at 0.7610 to open trade this morning where resistance appears to be holding at the moment. The New Zealand Dollar trades slightly lower at 0.7380 against the Aussie on the open of Asian markets and later today quarterly manufacturing sales figures will be released.
We expect a range today of 0.7570 - 0.7660
Great British Pound: The Nationwide House Price Index revealed UK house prices to have risen 0.5% in March and the British Pound rallied towards 1.6150 against the Greenback off the back of this news. The U.K. banks were soon to rain on the Pound's parade however and 130 points were soon wiped from its value as they announced an unexpected increase in Mortgage defaults. Helping push Cable to session lows was inflation data from Europe and the ensuing speculation the ECB will raise rates next week; strong buying of the EUR/GBP cross rate meant Cable dipped to 1.6020 and despite a brief attempt to push back to 1.6100 we open this morning at 1.6030. Commodities strength has not left the Pound with much of a chance against the Aussie or the Kiwi either opening today at 1.5510 and 2.1040 respectively.
We expect a range today of 1.5480 - 1.5600
Majors: The safe-haven currencies continued to fall yesterday as risk sentiment remain high in the markets. The Euro was bolstered by an unexpected increase in euro-zone inflation and gained 50 points to break through 1.4200 upon news CPI estimates are 2.6% year on year. A higher than expected level of inflation undoubtedly sparked further speculation the European Central Bank will raise interest rates at their monthly monetary policy meeting next week. The Japanese Yen has continued to fall across the board as it remains entrenched in its bearish post-intervention trend. Japan's ministry of Finance announced that 692.5 billion Yen was sold last month and after a push to all time highs against the Greenback, it now trades close to pre-quake levels. Staging a rally towards the close of New York, the US Dollar has rallied through 83.00 to open today at 83.20 ahead of a big day in the markets. Japan's Tankan Manufacturing Index is due to be released later this morning as well as the US Non-Farm Payrolls report overnight tonight, both of which are key indicator's of economic health and hold considerable market influence.
Data releases
AUD: AIG Manufacturing Index; Commodity Prices y/y
NZD: Manufacturing Sales q/q
JPY: Tankan Manufacturing Index; Tankan Non-Manufacturing Index
GBP: Manufacturing PMI
EUR: Final Manufacturing PMI; Unemployment Rate
USD: Non-Farm Employment Change; Unemployment Rate; ISM Manufacturing PMI
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