Daily Forex Forecast 10/15/2012
Australian Dollar:
The Australian dollar consolidated weekly gains well on Friday after Trade Balance figures from China showed iron ore imports climbed at their quickest pace in 20-months. Trading to a late afternoon high of 1.0289 against its US Counterpart increased demand from China has helped explain the recent rebound in iron prices. Despite the move higher intraday some fairly stiff resistance still remains around the 1.03 level with investors generally unwilling to take it higher given lingering growth concerns surrounding China as well as another European Summit set to commence this Thursday. Opening lower this morning at 1.0231 a relatively quiet day of trade is expected with interim support likely to hold firm initially at 1.0200 followed by 1.0170.
We expect a range today of 1.0190 – 1.0260
New Zealand Dollar
Easing concerns that China will fall short of its annualised growth target of 7.5%, the New Zealand dollar rallied during Asian trade after exports grew at their fastest pace in three months following the release of September’s trade balance figures. Given the cautious view of many towards China, its widely expected Policy Makers will once again review their capital reserve ratio later this week in an attempt to stimulate economic growth. Despite early highs being witnessed around the 0.8210 mark against its US Counterpart a pull back in North American trade sees the Kiwi open this morning overall unchanged currently buying 81.61 US Cents.
We expect a range today of 0.8130 – 0.8190
Great British Pound:
The Great British Pound moved higher against its US Counterpart on Friday touching highs of 1.6096. In a report prepared by Ernst & Young it’s become widely expected GDP will fall this year to a mere 0.2 percent before rising to 1.2 percent in 2013. Whilst the Sterling does open 30 basis points stronger against the Greenback at 1.6071 this morning MPC meeting minutes due for release on Wednesday followed by European Summit meetings on Thursday will be the highlight this week. Meanwhile on the cross the rates the Sterling has also remained firm against both the Aussie (1.5702) and the Kiwi (1.9689).
We expect a range today of 1.5670 – 1.5730
Majors:
It what proved to be a very quiet end to the week a gauge of consumer sentiment in the world’s largest economy soared to its highest level since September 2007. Despite talks of a fiscal cliff, continued signs of weakness throughout the labour market as well as approaching elections, respondents to the University of Michigan’s Survey apparently remain unaffected. With the Greenback strengthening against the Japanese Yen on Friday (highs of 78.414) investor’s attention has already turned to European Summit Meetings which are set to commence this coming Thursday in Brussels. Whilst in Europe, optimism brewed over the weekend that Policy Makers are moving closer to an adequate firewall to protect nations against further turmoil as German Finance Minister Wolfgang Schaeuble ruled out a Greek exit. Resolving Greek concerns as well as the timing of a potential Spanish bailout will remain high on the agenda this week as investors seek something more substantial than mere “talks”. In a positive session for the Euro the shared unit opens a third of a cent stronger this morning at 1.2953
Data releases
AUD:
No Data Today
NZD: No Data Today
JPY:
BOJ Skirakawa speaks
GBP: CB Leading Index m/m
EUR:
Industrial Production m/m
USD:
PPI m/m, Prelim Yom Consumer Sentiment, Federal Budget Balance