Daily forex forecast -11/01/2011
Australian Dollar: Australian Retail Sales gained for the month of November with the figure coming in at 0.3% compared with previous month’s abysmal reading of -1.1% . The release sent to Australian Dollar up from 0.9950 prior to the release to 0.9970 and shows the Australian consumer is still willing to part with their hard earned dollars despite the overnight cash rate sitting at 4.75%.
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During the offshore session the local dollar moved between 0.9882 and 0.9968 despite any top tier data being available. Adding to Aussie volatility today will be the release this morning of the local Trade Balance which is expected in at A$2.05 Billion, down from a previous reading of A$2.63 Billion.
We expect a range today of 0.9880 to 0.9990
New Zealand Dollar: The release in New Zealand yesterday indicated that the trade balance narrowed to –NZ$186 million compared with a forecast of –NZ$133 million as rising exports signify that the NZ economy may avoid recession following a negative reading in third quarter GDP last month. The Kiwi initially fell on the release to 0.7590 before trading between 0.7571 and 0.7645 during the European and US sessions. The Kiwi is currently changing hands at 1.3043 against the Australian Dollar.
We expect a range today of 0.7550 to 0.7650
Great British Pound: The Pound continues to hold above 1.55 against the Greenback as traders narrow their bets that the Bank of England will look to start tightening the cash rate sooner rather than later. The Bank of England is due to meet this coming Thursday but nothing major is expected with the general tone remaining standard and in line with previous meetings. Overnight the Halifax House Price Index (change in the prices of financed by HBOS) with the reading coming in worse for wear at -1.3%, compared with a previous reading of -0.2% indicating that the real estate market is not yet out of the woods yet. The British Pound is up against the Australian Dollar (1.5636) and down against the New Zealand Dollar (2.0400).
We expect a range today of 1.5550 to 1.5750
Majors: The Greenback lost marginal ground against the EURO (1.2943), Pound (1.5569) and Japanese Yen (82.70) as global stock markets fell for the fourth day in a row and the cost of insuring European Sovereign Debt rose to record levels. With little data out of both Europe and the US in the last 24 hours the market ran with rumour and fear of further European Sovereign Debt issues spreading further into Portugal, Spain and potentially Italy. Portugal and Spain will have bond auctions this week but the market is sceptical about the uptake of the bond sale and the possibility of financial intervention by the ECB.
Data releases
AUD: Trade Balance
NZD: Building Consents
JPY: Leading Indicators
GBP: BRC Retail Sales Monitor y/y
EUR: No Data slated for release
USD: FOMC Member Plosser and Kocherlakota speak
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