Daily Forex Forecast 09/20/2011
Australian Dollar: The Australian Dollar opened under pressure yesterday and as ongoing European debt fears hampered Asian equity markets, our local dollar also continued lower. After gapping 50 points lower first thing Monday morning, the 1.0300 handle was soon broken and the Aussie was only to find support around 1.0240.
Looking heavy into the offshore session the Australian Dollar continued lower, finding support at 1.0170 and it opens this morning off these lows at 1.0210. This morning markets will be focusing on the release of the RBA monetary policy meeting minutes, and with interest rate expectations faltering of late the AUD may be facing some downside risk in the short term at least.
We expect a range today of 1.0150 – 1.0260
New Zealand Dollar: Risk aversion well and truly seized the markets yesterday morning, after news emerged that Greece may have to wait longer for its next round of bailout funds. After gapping 50 points lower on open, the Kiwi attempted to recover some ground and fought back to 0.8270 although inevitably it was set to head into offshore trade lower, trading around the 0.8230 level.
With little new information on the table, sentiment remained subdued throughout European and North American hours and the Kiwi fell to a low of 0.8180. A late rally pushed the pair 100 points higher to 0.8280 although this morning opening levels are back around 0.8230. On the cross rates, the AUD/NZD is trading at 1.2400 (0.8065).
We expect a range today of 0.8170 – 0.8260
Great British Pound: The British Pound continued to lose ground after yesterday’s open as investors flocked back to the safe-haven currencies. The 1.5700 handle has established itself as a key support level, and Cable flirted with this support for the majority of the Asian session.
Moving into local trade support around 1.5720 soon gave way the along with other riskier assets, the Pound slipped to intraday lows of 1.5640 and remains below the 1.5700 handle this morning at 1.5690. On the cross rates the Pound is slightly higher against the Aussie at 1.5350 and relatively unchanged against the Kiwi at 1.9050.
We expect a range today of 1.5280 – 1.5400
Majors: With little likely to sway the market from a fundamental perspective, investors spent Monday wallowing in the ongoing threat of a Greek default. Investor sentiment has taken a hit so far this week and as such the Euro remains capped below the 1.3700 level since markets opened on Monday morning.
Trading to a low near 1.3590, it then rallied to a high of 1.3710 as opinions swayed as to the likelihood of Greece receiving its next tranche of bailout funds. Also on the radar this week is the conclusion of the FOMC meeting in the US on Wednesday and whether or not a third round of quantitative easing will be announced. The Euro opens this morning at 1.3675 against the US Dollar and the Greenback buys 76.55 Japanese Yen after hitting a low of almost 76.30
Data releases
AUD: Monetary Policy Meeting Minutes
NZD: No data due for release
JPY: No data due for release
GBP: Nationwide Consumer Confidence
EUR: German ZEW Economic Sentiment; German PPI m/m; ZEW Economic Sentiment
USD: Building Permits; Housing Starts