Daily forex forecast - 02/12/2010
Australian Dollar: The Australian dollar was one of the most active currencies during the Asian session yesterday as it dealt with disappointing local data in contrast to favourable developments offshore. The Aussie economy grew less than expected last month as Gross Domestic Product figures came in at 0.2% and our dollar fell back through 96 cents to 0.9550. Not too long after an improving Chinese PMI helped provide some support and the Australian Dollar pushed back towards 0.9600. Improving investor sentiment and positive economic reports from the US and Europe saw the rally continue offshore and levels of 0.9650 were reached before speculation spread of the ECB's intention to assist its debt ridden countries. This news saw the Aussie push higher towards 97 cents only to fall slightly short. We open today at 0.9680 with Australian Retail Sales and Trade Balance figures due on the economic calendar.
We expect a range today of 0.9590 - 0.9750
New Zealand Dollar: With the recent shift in risk appetite the New Zealand dollar has bounced off lows at 74 cents to briefly break back through 75 cents. The rally began in Asia yesterday as Chinese Manufacturing increased and continued offshore, consolidating around 0.7460/70 for most of the European session. Along with most of its major counterparts, the Kiwi jumped noticeably on possible ECB intervention to the debt crisis and NZD/USD jumped 50 points to reach highs just above 0.7500. We open local trade today flirting with the 75-cent handle and once again it appears the currency pair will look towards overall investor sentiment to forge its direction. Against the Australian dollar the Kiwi jumped to 0.7770 after disappointing Australian GDP figures were released but has since lost ground to open this morning at 0.7735.
We expect a range today of 0.7430 - 0.7550
Great British Pound: Some relief in the Euro-zone and impressive local manufacturing figures has helped the Pound recover from recent lows to push back to highs above 1.5640. A relatively quiet Asian session soon gave way to some more exciting trade and when an increase in UK Manufacturing PMI was reported against an expected decrease Cable rose 50 points and continued to test the aforementioned highs. Volatile trade did see the Pound slide off from these highs but ECB speculation spurred a return above 1.5600 and we open today ahead of Halifax House Prices and Construction PMI at 1.5630. With the commodity currencies benefiting from current risk trading Sterling has failed to hold onto recent gains against the Aussie and the Kiwi, opening today at 1.6130 and 2.0820 respectively.
We expect a range today of 1.6050 - 1.6180
Majors: The Euro has stage a rally against the Yen and the Greenback for the first time this week upon speculation the European Central Bank will tomorrow indicate its willingness to help curb the region's debt crisis. After losing 6.9% of its value in November, EUR/USD jumped 120 points to test 1.3180 upon hearing the news, and the Euro also climbed higher against the Yen to reach 110.70. The safe- haven currencies have also come under pressure with the release of economic data from the US and China indicating economic growth is underway. Yesterday saw Chinese Manufacturing PMI increase more than predicted as well as the addition of 93,000 jobs in the US to non-farming sectors. The Federal Reserve also announced the economy has gained strength in 10 out of 12 regions across the US, with an improvement in hiring, an expansion in manufacturing and an anticipated strong holiday retail season. In what currently seems to be a risk-on market, the Euro opens today at 1.3140 and the Japanese Yen at 84.20. Investors will now be watching the ECB meeting overnight with their expectations heavily priced into the market.
Data releases
AUD: Retail Sales m/m; Trade Balance; World Cup Hosting Announcement
NZD: No Data Due Today
JPY: Capital Spending q/y; Monetary Base y/y
GBP: Halifax HPI m/m; Construction PMI
EUR: ECB Rate Decision; Revised GDP q/q
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