Daily Forex Forecast 09/03/2011
Australian Dollar: The Australian Dollar opens marginally weaker against the greenback today at 1.0100. The unit lost one-third of a cent during the Asian session on Tuesday down to a low of 1.0105 after a survey of business conditions indicated domestic demand may slow in the months ahead.
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The National Australia Bank survey for February showed conditions rose moderately to minus 2, from minus 6. The data had investors reassessing forecasts as to the timing of the next move in interest rates, keeping a lid on the currency ahead of the offshore session. Further interest rate clues will unfold on Thursday when the Australian Bureau of Statistics will release jobs data with the unemployment rate widely tipped to remain steady at 5 per cent.
We expect a range today of 1.0040 - 1.0125
New Zealand Dollar: The New Zealand Dollar opens a shade higher against the greenback today at 0.7390. The unit spent most of the domestic session trading sideways around the 0.7360 area after a survey of New Zealand house values revealed a modest rise in February. Investors were also exercising caution ahead of Thursday's official cash rate decision where rates may be cut by as much as 50 basis points to 2.5 per cent. During the offshore session, the kiwi traded as high as 0.7417 as some market participants viewed the recent sharp sell-off as being overdone. The kiwi opens marginally higher against the Australian Dollar this morning at 0.7310.
We expect a range today of 0.7370 - 0.7415
Great British Pound: Pound Sterling (1.6150) hit a 10-day low at 1.6124 overnight after a report showed retail sales dropped in February, all but wiping out any prospect of an interest rate rise on Thursday. Retail sales declined 0.4 per cent from January which helped push the currency down against the greenback for a fourth-straight session. The Bank of England is widely tipped to leave rates on hold at 0.5 per cent. Meanwhile, the pound opens lower against both the Australian Dollar (1.5980) and the New Zealand Dollar (2.1844).
We expect a range today of 1.5950 - 1.6020
Majors: The Euro (1.3900) fell sharply overnight as investor uncertainty swept markets as European Union leaders meet to discuss solutions to the region's debt crisis. The Euro hit a 24-hour low of 1.3861 on renewed sovereign-debt jitters. Earlier this week, the 17-nation currency hit a four-month peak above 1.4000 and has risen 9 per cent this calendar year on speculation the European Central Bank will raise interest rates next month. Meanwhile, the greenback opens higher against the Japanese Yen (82.61) buoyed by a positive session on equity markets and a 2 per cent fall in the price of oil (US$104.93/barrel).
Data releases
AUD: Home loans, Jan; Westpac Consumer Confidence, Mar
NZD: No data today
JPY: Machine Orders, Jan
GBP: Trade Balance, Jan
EUR: German Industrial Production, Jan
USD: No data today
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