Daily Forex Forecast 11/01/2012
Australian Dollar
The Australian dollar received a boost yesterday after building approvals in the month of September accelerated by 7.8 percent. Comfortably beating the mean forecast of 1.9 percent investors took the opportunity to jump on the local unit taking it as high as 1.0398 against its US Counterpart. Whilst a private sector credit reading also came in better than expected investors still appear reluctant to fully commit to a move above the 1.04 mark. On the outlook today with a sense of normality returning to markets following the destruction of Hurricane Sandy investors will look towards China where Manufacturing PMI is scheduled for release this morning. Should such figures mark a expansion in output (a reading above 50) this is likely to propel the Australian dollar higher as we open this morning firmer at a rate of 1.0375.
We expect a range today of 1.0340 - 1.0410
New Zealand Dollar
Whilst the New Zealand dollar has remained within its recent ranges over the past 24 hours the re-opening of Wall Street for the first time this week combined with a European debt market which has been contained of late have both contributed to a marginally firmer Kiwi this morning. Whilst markets returned to full capacity there was a slight shift back into assets deemed in nature including the likes of the New Zealand dollar. Reaching highs of 0.8228 against its US Counterpart, for the second consecutive day we find ourselves opening at levels in excess of the 82 US Cents mark. In what’s shaping up as a busy end to the week Chinese Manufacturing PMI due for release today followed by US non-farm payrolls tomorrow remain key risk events for the New Zealand dollar.
We expect a range today of 0.8190 – 0.8250
Great British Pound:
The Great British Pound has rallied in the face of adversity for much of the past 24 hours. Despite a string of poor economic announcements released by its European neighbours as well as local equities which finished in the red the Sterling has performed remarkably when compared against the US Dollar. Hitting highs of 1.6134 against the Greenback some support was provided after British retailers reported a strong rise in sales volumes in the year to October. In what’s likely to be telling session today interim support around the 1.61 level could be tested should concerns of global growth once again surface. Meanwhile on the crosses the Sterling is stronger against both the Aussie (1.5554) and the Kiwi (1.9617).
We expect a range today of 1.5520 – 1.5590
Majors:
Following a two day lull markets returned to normal operation overnight with investors keen to square off positions before month’s end. In a surprisingly smooth day of trading markets chose to generally ignore the string of poor economic releases instead focusing on near-term activity ahead of key announcements at weeks end. Speaking of poor readings European unemployment rose from 11.4% to 11.5% for September whilst for the second consecutive month the MNI Chicago Report showed production in the world’s largest economy had contracted. Moving to lows of 1.2945 against its US Counterpart the Shared currency was weighed down by a Euro-area government which has continued to press Greece in attempts to spur deeper spending cuts before a further 31 billion-euro worth of aid is paid-out to the highly indebted nation. Whilst Athens attempts to rein their budget deficit will likely remain a point of influence over the coming weeks in the short-term markets look towards Chinese PMI (due for release today) ahead of key US labour markets releases tomorrow. Meanwhile this morning the Euro is lower at 1.2957 with the Greenback sitting higher against the Japanese Yen at 79.818.
Data releases
AUD:
AIG Manufacturing Index, Import Prices q/q
NZD: No data today
JPY:
No data today
GBP: No Data Today
EUR:
French and Italian bank holiday
USD:
ADP non-farm employment change, unemployment claim, CB Consumer Confidence, ISM Manufacturing PMI