Daily Forex Forecast 02/09/2012
Australian Dollar
In figures released yesterday Australia’s unemployment rate rose to 5.2 percent in February as companies across the nation shed more than 15 000 workers. Whilst the jobless rate did match expectation a softening labour market has prompted calls for the RBA to cut interest rates sooner rather than later. Following the announcement the Australian dollar was immediately sold with the local unit reaching an early afternoon low of 1.0522 against its US Counterpart. Recovering well from its earlier losses the mood turned positive as the Australian dollar entered the offshore session with global markets enjoying the strong signals from Greece that they will strike a critically important deal with private investors which would see an overall write off 125 Billion Euros. In what has been a roller coaster ride for the Aussie over the past 24 hours, the higher yielding currency opens a full Cent stronger this morning, currently trading at a rate of 1.0664.
We expect a range today of 1.0600 -1.0720
New Zealand Dollar
The New Zealand Dollar rebounded strongly yesterday after the Reserve Bank of New Zealand decided to maintain the official cash rate at 2.5 percent in early morning trade. Despite a slow start to the day in which local equities failed to find any solid footing the Kiwi rebounded well as it entered European Markets gaining over 1 US Cent from its earlier low of 0.8139 against its US Counterpart. Helping click the risk button on overnight was renewed optimism out of Greece that the highly indebted nation will secure its second bailout package as they move towards securing the necessary private bondholder participation. With positive employment data also flowing out of the US the Kiwi rain out of steam just shy of the 82.70 US Cents mark. Having reached an all time high of 0.8843 last August against the Greenback the New Zealand currency has done very well to maintain levels above 82 US Cents this week.
We expect a range today of 0.8210 – 0.8310
Great British Pound
The Bank of England held its key cash rate at 0.5 percent and maintained its commitment to buy a further 50 billion pounds by May in a meeting held yesterday. Whilst the outlook for the British economy remains very much clouded the Great British Pound received a much needed boost yesterday with news that Greece has moved closer to a private bondholder agreement doing enough to shift markets well and truly into positive territory. After trading to an earlier low of 1.5723 against its US Counterpart, following a handful of major currencies higher the Sterling opens more than a full cent stronger this morning currently swapping hands a rate of 1.5829. Meanwhile on the cross rates overnight the advances of the Sterling were limited against the commodity based currencies losing ground against both the Aussie (1.4838) and the Kiwi (1.9141)
We expect a range today of 1.4770 – 1.4900
Majors
US Stocks rose, sending the S&P 500 Index towards its best two-day rally of the year after falling as much as 1.5 percent earlier in the week. In a bullish evening of trade across global markets, investors received the boost they were looking as concerns over Europe’s debt crisis eased. With it now looking more and more likely Greece will be able to achieve the necessary 75 percent participation rate from private bondholders which would allow the highly indebted nation to write off 125 Billion Euros. Well purchased following the news the 17-Nation appreciated 0.9 percent against its US Counterpart and after trading between a 24 hour range of (1.3134 – 1.3290) it opens more than cent stronger this morning at a rate of 1.3280. Whilst in Europe, in line with expectation the ECB kept its official cash rate unchanged overnight at 1 percent with ECB President Mario Draghi stating that the euro-zone has stabilized somewhat over the previous month and the overall economic environment has improve enormously, suggesting a end to record-low interest rates at some stage this year. Meanwhile in the US overnight weekly unemployment claims remained steady ahead of the headlined non-farm payroll figures which are due for release this evening.
Data releases
AUD:
Trade Balance
NZD: No Data Today
JPY:
M2 Money Supply y/y
GBP: Manufacturing Production m/m, PPI Input m/m, Consumer Inflation Expectation, Trade Balance, Industrial Production m/m, PPI Output m/m
EUR:
German Final CPI m/m, German Trade Balance, French Industrial Production m/m, Italian Industrial Production m/m
USD:
Trade Balance, Unemployment Rate Wholesale inventories