Daily Forex Forecast 02/03/2012
Australian Dollar
The Australian Dollar gained 20-30 points during local trade yesterday after it was announced our trade surplus increased to 1.71 billion dollars from a previous 1.38 billion. With markets expecting a slight reduction the news came as a pleasant surprise, lifting the Aussie from levels just above 1.07 to 1.0730. Concurrently, building approvals dropped 1% in the month of December although the markets chose to overlook this in favour of a positive trade release. With markets nervous ahead of a still yet to be confirmed Greek deal with its bond holders, as well as key unemployment data out of the US this evening, the Aussie struggled to hold onto its highs. Drifting lower into offshore trade, fluctuating risk sentiment kept trade moving between 1.0690 and 1.0740 and we open ahead of the final trading day of the week at 1.0710.
We expect a range today of 1.0660 – 1.0760
New Zealand Dollar
An absence of key local data releases has kept the New Zealand Dollar at the mercy of risk sentiment over the past 24 hours, where it has remain in range bound trade for the most part. With investors setting up camp on the sidelines ahead of key unemployment data from the US this evening, this nervousness has been amplified by the failure of Greece to reach and agreement with its creditors as yet. Sitting above support at 0.8315, a brief risk rally took the Kiwi to highs near 0.8360 however it settles lower this morning back at 0.8330. An increase in the trade surplus of Australia did pose a momentary threat to recent gains the New Zealand Dollar has made against its rival across the Tasman; a determined Kiwi refusing to give ground so easily sees the pair this morning back at the familiar level of 1.2850 (0.7782).
We expect a range today of 0.8290 – 0.8370
Great British Pound
Sterling has fallen back from near two-and-a-half month highs against the Greenback overnight after Construction PMI for the month of December disappointed the markets. The Markit Economics survey signalled a thirteenth successive monthly rise in UK construction sector output; however the rate of expansion eased and was modest. A reading of 51.4 caused the Pound to drift back from intraday highs near 1.5850 to open this morning at 1.5800/10. Also drifting lower against the Australian and New Zealand Dollars, risk sentiment has limited movement with Sterling opening at 1.4750 and 1.8965 respectively.
We expect a range today of 1.4690 – 1.4800
Majors
Despite Greece failing to reach an agreement with its private sector bond holders, the Euro Dollar appears hesitant to break from its current ranges against the Greenback. Whilst disappointment as to the lack of progress caused the single currency to fall to intraday lows of 1.0390, anticipation of tonight US Non-Farm Payrolls kept hesitant traders within recent ranges. With what we could see as a prelude to tonight’s key employment data, unemployment claims in the US fell by 12,000, more than the 6,000 drop that was anticipated. Investor sentiment picked up on the news, along with an increase in Nonfarm Productivity and Labor Costs, sending the Greenback lower on demand for riskier assets. The Euro trades this morning back at 1.3140/50 and the Japanese Yen has risen back towards highs at 76.15.
Data releases:
AUD: AIG Services Index;
NZD: Visitor Arrivals m/m
JPY: No data due for release
GBP: Services PMI
EUR: Final Services PMI; Retail Sales m/m; Italian Prelim CPI m/m
USD: Non-Farm Employment Change; ISM Non-Manufacturing PMI; Unemployment Rate; Average Hourly Earnings m/m; Factory Orders m/m