Australian Dollar:
The Australian dollar initially rallied against the Greenback yesterday after China’s Consumer Price Index came in below expectation reducing the pressure on Policy Makers to tighten monetary policy in response. Trading as high as 1.0440 intraday, the ongoing spending habits of China are set to greatly influence demand for the higher yielding asset considering the world’s second largest economy remains Australia’s largest two-way trading partner. Continuing its solid start to the day US Stocks which closed at a record high only helped encourage more buying as the Australian dollar briefly touched a level of 1.0508. Critical for short-term direction investors will be closely watching Chinese trade balance figures which are due for release today followed by local unemployment figures tomorrow. Meanwhile this morning the Aussie dollar is stronger at a rate of 1.0490.

We expect a range today of 1.0460 – 1.0510

New Zealand Dollar
Similar to its Trans-Tasman rival the New Zealand dollar received a boost yesterday after Chinese figures showed the annual rate of inflation fell to 2.1 percent in March, from 3.2 in February. Well supported by positive leads out of Europe and the US overnight positive sentiment has fuelled a move back into assets deemed riskier in nature. Moving to an overnight high of 0.8535 against its US Counterpart the New Zealand dollar has done well to consolidate gains up above the 85 US Cents mark as it we open stronger this morning at 0.8522.

We expect a range today of 0.8490 – 0.8550

Great British Pound:
Leading to a substantial rally in the Great British Pound UK Manufacturing rose twice as much as forecast in February rebounding nicely from the previous month. With factory output increasing by 0.8 percent investors took this as an opportunity to buy the Sterling taking it to an overnight high of 1.5340 against the Greenback, almost a full cent above its earlier opening levels. Given a positive start to the US corporate earnings season combined with signs of cooling price pressures in China it comes as little surprise to see the Sterling has consolidated its gains opening stronger this morning at 1.5319. Despite its strength against the Greenback the Sterling is weaker against the Aussie (1.4600) and the Kiwi (1.7969) this morning

We expect a range today of 1.4570 – 1.4630

Majors:
Whilst price movements slimmed overnight, overall investors have remained in a positive frame of mind. With US Stocks rising and the S&P 500 Index recording its first back to back gain in more than three weeks positive earning season results flowed through to currency markets which saw the Euro strengthen from earlier lows of 1.3003 to opening levels this morning of 1.3079. Despite the lack of data across markets, comments made by Federal Reserve Chairman Ben S Bernanke that economic conditions were far from where he would like them to be did garnish some attention as investors await the release of minutes from the FOMC’s most recent March meeting. Meanwhile in other currency moves overnight the Japanese Yen strengthened against the Greenback following speculation that it has fallen too far and too quickly. Strengthening from its weakest level in almost four years against the dollar the USD/JPY as a result is lower this morning at 99.03.

Data releases

AUD:
Westpac Consumer Sentiment

NZD: No data today

JPY:
Bank Lending y/y

GBP: No data today

EUR:
French Industrial Production m/m/, Italian Industrial Production m/m

USD:
FOMC Meeting Minutes

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