Daily Forex Forecast 11/14/2012
Australian Dollar
The Australian dollar has broadly struggled against its US Counterpart over the past 24 hours. Well supported by a recent string of sturdy results from China as well as improved signs within the local housing market, strong gains across global equities have also helped the Aussie dollar maintain levels in excess of the 1.04 mark overnight. Capping gains ahead of 1.0450 it comes as no surprise to see that investors remain reluctant to take the domestic unit higher given US President Barack Obama is set to meet Congress later this week in an attempt to avoid the much talked about Fiscal cliff. On the outlook today investors look towards the release of a consumer sentiment survey which is likely disappointment markets following on from yesterdays NAB business confidence reading which showed business conditions slumped in October to their lowest level since May 2009. Meanwhile this morning the Aussie opens relatively unchanged at 1.0435
We expect a range today of 1.0400 – 1.0460
New Zealand Dollar
Rallies on Wall Street combined with easing debt concerns throughout Europe were enough to push the New Zealand dollar into positive territory overnight. Trading as high as 0.8202 against its US Counterpart the subsequent rally across equity markets was triggered by better than expected earnings from Home Depot, the largest US home improvement retailer. Despite the positive shift in global risk sentiment levels above 82 US Cents, at least in the short-term appear a little excessive for New Zealand’s dollar. In what has the ability to push the Kiwi above this threshold core retail sales are expected to be released shortly with any reading above 0.6 percent likely to provide support. This morning sees the New Zealand dollar buy 81.95 US Cents
We expect a range today of 0.8160 – 0.8230
Great British Pound:
UK Inflation unexpectedly rose by 2.7 percent from a year earlier in the month of October. Comfortably beating the majority of forecast the jump in prices may see CPI growth move away from the BOE’s target which currently sits at just 2 percent. Whilst much of the spike has been contributed to a rise in University tuition fees higher prices will only add to the difficulties in setting appropriate monetary policy. Touching lows of 1.5855 against its US Counterpart it has been a quite overnight session for the Sterling which opens generally unchanged this morning at 1.5870. Meanwhile on the cross rates there were signs of weakness against the Aussie (1.5205) and the Kiwi (1.9370), which both open lower.
We expect a range today of 1.5170 – 1.5230
Majors:
Despite a rally in Wall Street which was triggered by improved earnings from Home Depot overnight, in figures released the US government’s budget deficit worryingly widened in October. Whilst only in the first month of the new fiscal year the deficit expanded a staggering 22 percent blowing out the deficit by $120 billion, well up from the shortfall of last October. Increasing the pressure on Barack Obama to reduce the deficit well in advance of the Fiscal cliff which will take effect on Jan.1 the US President is set to meet with Congress this week in an attempt to address such concerns. Meanwhile in Europe overnight debt concerns have temporarily been eased following the decision of Policy Makers to give Greece two more years to trim its budget deficit. In currency movements the Euro’s reaction was relatively muted, trading close to recent lows of 1.2660 against its US Counterpart. Meanwhile this morning the shared unit opens marginally weaker clinging to 1.27 after a survey also showed investor confidence in Germany and broader Europe unexpectedly fell in October.
Data releases
AUD:
Westpac Consumer Sentiment, Wage Price Index q/q
NZD: Core Retail Sales
JPY:
No data today
GBP: Claimant count change, Unemployment rate, BOE Gov King Speaks, BOE Inflation Report
EUR:
Industrial Production m/m
USD:
Core retail sales m/m, PPI m/m, FOMC Meeting Minutes