Daily Forex Forecast 01/17/2013
Australian Dollar:
In a Westpac run survey consumer confidence surprisingly dropped in December with the Index now sitting below the levels of November 2011, when the RBA first started there easing cycle. In a generally quiet day for the Australian dollar the higher yielding asset has drifted 20 basis points either side of the 1.0550 mark against its US Counterpart with investors opting to wait until the release of key unemployment data due out this morning. Given the labour market is expected to of softened in the month of December the consensus is for the unemployment rate to have jumped from 5.2% to 5.4%. Keeping in mind resistance at 1.06 is now well established a strong reading would be required to push the local unit higher. Whilst on the data front key releases from China tomorrow are also expected to provide some fireworks as the Aussie dollar Aussie dollar opens virtually unchanged this morning at 1.0567.
We expect a range today of 1.0520 – 1.0600
New Zealand Dollar
The New Zealand dollar opens steady this morning having reached a low of 0.8366 against its US Counterpart overnight. With global stocks little changed the Kiwi has struggled for direction over the past 24 hours and given the lack of local data it appears already investors are awaiting key growth figures which are expected out of China tomorrow. Should this critical reading show growth in 2012 exceed 7.8% this would certainly help in establishing some firmer support for the growth linked currency up above the 84 US Cents handle. Meanwhile this morning the Kiwi opens just above this mark as it buys 84.04 US Cents.
We expect a range today of 0.8370 - 0.8430
Great British Pound:
Along with global markets the Great British Pound fell yesterday with the main catalyst being a prediction made by the World Bank that the Eurozone economy will shrink over the coming year. Contradicting the positive yet somewhat optimistic rhetoric held by the ECB which only last week predicted a steady recovery in 2013 markets have continued to trade the rumour. Reaching lows of 1.5974 overnight moves over the coming 24 hours are likely to be triggered through data releases in the US and China ahead of domestic Retail Sales on Friday. Meanwhile this morning the Sterling opens weaker against the Greenback (1.5995), the Aussie (1.5135) and the Kiwi (1.9024).
We expect a range today of 1.5100 – 1.5170
Majors:
Keeping a lid on any possible advances yesterday The World Bank sharply cut its outlook for world growth in 2013 from 3 percent down to 2.4 percent. Holding the view that developed nations will continue their slow road to recovery such downgrades do emphasise the challenges which lie ahead especially given signs of weakness even in Europe’s flagship sovereigns as well the ongoing concerns surrounding the US fiscal cliff. Drifting to overnight lows of 1.3255 against its US Counterpart the Euro continued its downward path still clearly affected by Jean-Claude Junckers comments that the Euro remains “dangerously high”. In line with the Euro zone finance ministers claims poor industrial production results along with final quarter growth readings which are set disappoint have well and truly constrained the shared unit which opens a third one cent lower at 1.3277. In the US overnight despite CPI of 0.1% coming in around expectation Building Permits, Unemployment claims and a reading for manufacturing will all come in into focus this evening
Data releases
AUD:
Unemployment Rate, MI Inflation expectations
NZD: No data today
JPY:
Tertiary Industry Activity m/m
GBP: No data today
EUR:
ECB Monthly Bulletin
USD:
Building Permits, Unemployment Claims, Housing Starts, Philly Fed Manufacturing Index