Daily Forex Forecast 04/05/2011
Australian Dollar: The Australian Dollar opens marginally lower today against the greenback at 1.0360. Fresh highs above US104 cents were reached during Monday's Asian session after an index of job advertisements as compiled by the ANZ Bank showed a rise of 1.3 per cent in March marking the eleventh straight month of increases. Despite the strong data, the Reserve Bank of Australia is expected to keep rates on hold at 4.75 per cent when it meets today to discuss monetary policy. The Aussie is also strong on a trade-weighted basis and is changing hands at 0.7280 Euro; 0.6420 against the British Pound and 84.00 against the Japanese Yen - an 11-month high.
We expect a range today of 1.0330 - 1.0420
New Zealand Dollar: The New Zealand Dollar has moved marginally higher in line with the recent strength in the Australian Dollar as risk appetite improves. The kiwi opens at 0.7670 against the greenback today after another strong session yesterday which saw a high of 0.7695. The unit briefly touched a 2-month high overnight of 0.7703. In the absence of any local economic data this week, traders will be keeping their eyes on developments offshore as there are interest rate decisions in Australia, England and Europe. Meanwhile, the kiwi opens a touch higher against the Australian Dollar at 0.7404.
We expect a range today of 0.7640 - 0.7710
Great British Pound: Pound Sterling opens higher against the greenback today at 1.6123 after a survey of building activity showed expansion last month. Sterling hit a one-week high of 1.6176 during overnight trade. Despite the positive data and a recent bout of risk appetite, the UK currency is likely to remain capped in the lead-up to Thursday's interest rate decision by the Bank of England. Rates are likely to remain on hold at 0.5 per cent. Meanwhile, the pound opens higher against both the Australian Dollar (1.5557) and the New Zealand Dollar (2.0990).
We expect a range today of 1.5500 - 1.5580
Majors: In the absence of any major economic data releases in the United States on Monday, the big dollar fluctuated against the Japanese Yen (84.00) and the Euro (1.4216). The greenback retreated from six-month highs against the Yen as Federal Reserve Bank of Atlanta President Darren Lockhart said the economy "still faces challenges" suggesting to market participants that interest rates are likely to remain on hold at 0 - 0.25 per cent until early next year. Meanwhile, the 17-nation Euro zone currency eased from 4-month highs above 1.4250 despite the prospect of a tightening in the benchmark interest rate by the European Central Bank as early as this week.
Data releases
AUD: Trade Balance, Feb; RBA Interest rate decision
NZD: No data today
JPY: Machine tool orders, March
GBP: Purchasing Managers Index, Services, March
EUR: Euro Zone retail sales, Feb
USD: US Fed minutes of March 15 FOMC meeting
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