Daily forex forecast

Australian Dollar: A fall in equities, gold and oil has seen the Australian Dollar slip against the Greenback as investors flock back to safety. Compounding this effect is the inherent strength provided by recent US economic data releases, and thus we have seen the Aussie slip from multi-decade highs now down 2 cents since last week at 1.0050. Local commodity prices were shown to rise yesterday as the RBA’s index increased to 48%, however a decrease in Manufacturing prevented any upward momentum and the Australian Dollar dropped from yesterday’s open of 1.0175 to lows of 1.0020. We expect support to lie at parity and New Home Sales data out later today will show whether or not this support is to be tested.

We expect a range today of 0.9990 – 1.0100

New Zealand Dollar: With yesterday’s bank holiday in New Zealand, investors had little to follow other than the direction of the US Dollar in determining the path of the currency pair. Unsurprisingly, the Kiwi has found itself stuck in a downwards trend and has fallen from yesterday’s opening levels near 0.7750 to test support at 0.7650. Only marginally above this, the New Zealand Dollar sits at 0.7670 and with no local data due this week it looks as though the Greenback will continue determine its direction. Opening today slightly higher against the Australian Dollar, the last 24hrs have not shown any significant direction for the antipodean currency pair. Finding a slightly higher level of resistance, the Kiwi sits towards the top of the current trading range this morning at 0.7630.

We expect a range today of 0.7610 – 0.7690

Great British Pound: Finally the Pound Sterling had a day to be proud of, with local Manufacturing increasing at its fastest pace in sixteen years in December. Jumping to 58.2 from a previous 57.5, it is possible such gains in this sector can offset weakness in other sectors and contribute towards overall economic growth. The Pound rallied strongly off the back of this data pushing from 1.5460 to highs near 1.5640. US strength has managed to suppress any further upward momentum, however majority of these gains have been held onto and Cable is now consolidated around 1.5590. A solid upward trend has also been observed against the Aussie and the Kiwi with the Aussie back above 1.55 this morning and the Kiwi back above 2.03.

We expect a range today of 1.5460 – 1.5560

Majors: The Greenback has entered the New Year at full steam, with a basket of encouraging economic data signalling recovery for the world’s largest economy. The latest release showed an unexpected increase in factory orders, up 0.7% as opposed to an expected 0.1% decline. Such positive results however were not deemed favourable enough by the FOMC to alter its current asset purchasing program, as its meeting minutes revealed yesterday. Members of the committee noted that although the results were encouraging, they require more time and more information to consider any adjustment to its quantitative easing strategy. With Europe’s debt woes and China scaling back to reduce inflation, the US does look to be the economy to watch and thus we have seen the EUR drop back below 1.3300 and the Japanese Yen back above 82.00 against the US Dollar.

Data releases

AUD: HIA New Home Sales m/m

NZD: No data due for release

JPY: Monetary Base y/y

GBP: Construction PMI

EUR: Industrial New Orders m/m; PPI m/m

USD: ADP Non-Farm Employment Change; ISM Non-Manufacturing PMI; Crude Oil Inventories

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