Daily Forex Forecast 03/27/2012
Australian Dollar
Following a relatively flat start to the day in which the Australian dollar traded within a tight intraday range, the Aussie came to life as US and European markets opened pushing past the 1.05 handle against its US Counterpart for the first time in 5 days. Sparking the rally in riskier-backed assets US Federal Reserve Chairman Ben S Bernanke said that further improvements in the job market would require continued stimulative Monetary Policy. With the Greenback immediately being sold off following the announcement the Australian dollar finds itself well supported this morning opening at a rate of 1.0542, close to its overnight high.
We expect a range today of 1.0480 - 1.0590
New Zealand Dollar
In figures released locally yesterday New Zealand’s trade surplus for the month of February continued to dwindle with the overall surplus of $161million showing exports were down by a notable 6.9 percent with exports now only out numbering imports by a measly 1.3 per cent. Following the Release the New Zealand dollar tracked downward for much of the day reaching an eventual low of 0.8141 against its US Counterpart. Despite its slow start, investor demand for the Kiwi picked up in a big way overnight with signs of further stimulative policies set to come out of the US Federal Reserve amid increased speculation that the European Union will also be heading down the road of increasing the size of its bailout fund. With such measures aimed at improving both liquidity and solvency the Kiwi has been well purchased over the past 12 hours rallying to overnight high of 0.8236 as it opens a half a cent stronger this morning currently buying 82.30 US Cents
We expect a range today of 0.8180 - 0.8280
Great British Pound
It was all good news for the Great British Pound overnight finding strength through a range of different avenues. After opening the day at a rate of 1.5870 against its US Counterpart, hints of further stimulus out of the US Federal Reserve, talks of a larger bailout fund from Europe as well as a German Business Confidence result which climbed to an eight month high, all pointed towards a stronger Sterling. Topping out a rate of 1.5972 the Sterling opens a full Cent stronger this morning at rate of 1.5967. Despite the large sell off in the Greenback which helped propel the Sterling in comparison the Great British Pound was unable to keep pace with both the Australian dollar (1.5146) and the New Zealand dollar (1.9397) which both open lower this morning.
We expect a range today of 1.5100 – 1.5200
Majors:
Global Stocks rose consistently overnight, rebounding strongly from last week’s losses. In what was a monumental session of trading, markets were well supported by news out Europe that the EU will look to increase the size of its bailout fund. Whilst the ECB has been focused on increasing liquidity through ensuing cheaper funds for its regions banks the provision of further bailout funding seeks to address longer term solvency concerns whilst providing a more convincing firewall. Whilst we start the day in a slightly different market the news helped the 17-Nation Euro rally to an overnight high of 1.3367 opening this morning a full cent higher than where we started the week at a rate of 1.3359. In comments which also dominated wires overnight US Fed Reserve Chairman Ben S Bernanke also hinted towards further stimulus for the US economy. Bernanke said that while he’s encouraged by an unemployment rate which has dropped to 8.3 percent, further easing will be required to help continue the trend. With the Greenback dropping against the majority of its major counterparties the Dollar Index, a gauge of the US Currency against six major peers fell for a second consecutive day.
Data releases
AUD:
No Data Today
NZD: No Data Today
JPY:
CSPI y/y
GBP: Nationwide HPI m/m, CBI Realized Sales
EUR:
GfK German Consumer Climate, German Import Prices m/m
USD:
S&P/CS Composite-20 HPI y/y, CB Consumer Confidence, FOMC Member Dudley Speaks, Richmond Manufacturing Index, Fed Chairman Bernanke Speaks