Daily Forex Forecast 11/06/2012
Australian Dollar:
A busy ticket for Aussie data yesterday with retail sales, trade balance and ANZ job advertisements all being released but the results combined were generally uninspiring leaving us still with a 50/50 chance of a rate cut today. Retail sales figures came in slightly better than expected at 0.5% vs 0.4% while trade balance was narrower than expected at -1456M vs -1550M. With most of Australia taking a full or half day off, many will still be turning their attentions back to markets at 2:30pm today for the evens money race of the RBA rate decision. Due to the uncertainty we should get some movements in the currency whichever way it goes, with a hold pushing us close to 1.04 while a drop could see us in the lows of 1.03, either way the accompanying statement will be read with much interest. Following the ‘rate’ and then the race that stops the nation’ attentions will quickly turn back the big headline of recent days, the US election and a new short term range likely to form that will hold until we can get a conclusive result. This morning we currently find the AUD at 1.0360.
We expect a range today of 1.0315 – 1.0400
New Zealand Dollar:
The Kiwi again traded in a fairly tight range overnight, with little happening domestically the markets generally took direction from the busy overseas events, but with uncertainty still the order of the day there seems to be a bit of paralysis beyond the ranges. Early yesterday the relatively positive data across the Tasman did push NZD/USD up to its highs above 0.8260, while last night, problems again in Europe saw a drift lower to just above 0.8230. Elsewhere we also saw leaders at the G20 beginning to change their tune from focuses on the Euro debt problems to the US fiscal cliff, with the official statement due out today there were comments from Japanese, Canadian and Australian representatives urging the US Government to act soon on the potential destabilising event next year. This combined with the US election tonight keeps riskier currencies like the Kiwi under wraps for the time being. This morning we find ourselves in the middle of the range trading at 0.8245.
We expect a range today of 0.8265 – 0.8230
Great British Pound:
This morning we again find the pound lower as it failed to hold the 1.6000 big figure last night. The markets seem intent on selling out of GBP at the moment as any good news is somewhat ignored while negative is used as opportunity to retreat. The main news last night was the release of PMI services data which came in at 50.6 compared to expectations of 52.0, which was its lowest print in nearly two years, this may start to bring out the sceptics of the UK recovery just in time for the BOE meeting on Thursday. In news close by there were continued concerns over the European debt problems with Greece again the focus, this helped in dragging GBP/USD close to 1.5960, but also helped in pulling the EUR/GBP below 0.80. Tonight we have UK Industrial production along with Eurozone PPI but the focus is likely to remain on the US election and should keep the cable below 1.60 for the time being. Against the local currencies we currently have GBP/AUD lower at 1.5415 and GBP/NZD at 1.9365.
We expect a range today of 1.5385 – 1.5450
Majors:
Most currencies were fairly quiet over the last 24 hours as the focus remains on the US election tonight. As a general rule uncertainty is risk negative and so while things remain unclear in the tight presidential race markets will mostly favour the USD and JPY. In most cases over the last 24 hours the markets have shrugged off any positive data while taking anything negative as a good sign to sell out of riskier assets and buy the safe havens. The other main piece of news last was again the focus on Greece, as the austerity measures required to receive further bailouts are debated by politicians before a vote on Wednesday. If the reforms are not passed they risk missing out on the 31.5b EUR bailout fund from the IMF and EU. The EUR/USD fell below 1.27 overnight, its lowest level in nearly 2 months and will likely remain under pressure while the Greek issue hangs over it. In other currencies we have the USD/JPY lower currently at 80.25 as the Yen benefits from risk aversion flows, both the USD and JPY will likely remain strong while the US election remains in the balance, with most scenarios pointing to USD positive unless Obama has a clear early victory.
Data releases:
AUD:
RBA rate decision
NZD:
Average hourly earnings
JPY:
Leading index
GBP:
Industrial production
EUR:
EurozonePPI, German wholesale price index
USD:
No data today