Daily forex forecast

:: Australian Dollar: The recent rally of the Australian Dollar took a major hit yesterday as the RBA announced its decision to keep interest rates on hold at 4.5%. In his statement Governor Glenn Stevens stated that financial markets are still surrounded by a degree of uncertainty and considering a more sustainable rate of growth in the Asia region, current monetary policy is sufficient in keeping inflation at desired levels. AUD/USD dropped from 0.9670 to 0.9585 immediately upon release and continued to trade down to close the local session around 0.9560. A dramatic recovery has been seen throughout the European and North American sessions however as investors look more closely at the position taken by the RBA and focused in on the latter part of the accompanying statement. Stevens' tone can still be considered quite hawkish for the upcoming months, affirming that if economic conditions continue to evolve as expected it is likely higher interest rates will be needed. The Aussie Dollar fought back as this information was digested and with the help of improved risk appetite, pushed through several key levels to break 97 cents once more. We enter today's Asian session trading at 0.9715 and after a busy economic calendar yesterday things may be a little quieter with no local data due for release today.

- We expect a range today in the AUD/USD rate of 0.9650 to 0.9750

:: Great Britain Pound: Sterling had a quiet session during Asian trade yesterday as it conceded centre stage to the Aussie and the Yen, and entered offshore trade just above the 1.58 handle. Markets soon saw a rally in Cable, partly due to a weakening in the Greenback and partly due to an increase in UK Services PMI which was higher than expected. Moving from a low near 1.5780, the Pound gained over a cent and touched highs above 1.5910 before the USA's PMI data release helped the currency pair test resistance around 1.5930. Not so lucky against the Aussie, gains made yesterday were wiped out overnight and GBP/AUD opens today at 1.6350, the same place we were 24 hours ago. Trading lower against the New Zealand Dollar we start today with support levels at 2.12 being heavily tested.

- We expect a range today in the GBP/AUD rate of 1.6275 to 1.6400

:: New Zealand Dollar: After losing some ground yesterday on decreased local Business Confidence the New Zealand dollar spent most of yesterday in range-bound trade between 0.7370/0.7400. Entering London around 0.7390, positive data to follow out of Europe and America gave the Kiwi the fuel it was looking for to stage a commendable rally as risky assets were bought up overnight. Pushing through resistance at 0.7420 and 0.7450, the New Zealand Dollar rallied towards 75 cents, but was unsuccessful in its attempt. Consolidating around 0.7480/90 we begin today unchanged at these levels and with no local data expected, the currency will continue to look to investor sentiment for direction. After gaining considerable ground against the Aussie yesterday after the RBA's rate announcement, the NZD has managed to hold onto these gains better than the Greenback and AUD/NZD remains below 1.30 this morning. Trading in a narrow range we open today at 1.2970.

- We expect a range today in the NZD/USD rate of 0.7425 to 0.7525

:: Majors: The Bank of Japan shocked the markets yesterday when it was announced they would be cutting their cash rate from 0.1% to near zero percent. The bold measure by the central bank comes as falling prices and the soaring Yen continue to cause concern for the exporting nation. The Greenback gaining almost 50 pips against the Yen and trading up to just shy of 84.00 upon release. The effect was short-lived however and throughout offshore trade the Yen retraced these losses and moved back towards key support at 83.15. Having broken through this level temporarily overnight, markets look to Bank of Japan's Monthly Report due out this afternoon to see as to whether JPY will continue its rally against the USD and retest 15 year highs below 82.90 as seen in September. Risk sentiment is picking up in the markets of late as many central banks talk of easing measures, and when it was announced in the US overnight that ISM Non-Manufacturing PMI increased above expectations appetite for high yielding assets took another leap. Indication that growth in this area is picking up has been seen as an early indicator towards the improvement of the subdued US payroll statistics. EUR/USD rallied overnight, also supported by local positive PMI data, to reach highs above 1.3850 and we start today trading around 1.3830. Eyes will be on the US tonight where in the lead-up to Friday's Non-Farm Payrolls we have the ADP Non-Farm Employment change; both of these releases a key indicator to the country's economic health.

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