Daily Forex Forecast 12/10/2012
Australian Dollar:
Following a week in which in the RBA cut rates of 0.25 percent, the number of unemployed dropped and economic growth remained on target you’d think the Australian dollar would be in for a bumpy ride. Despite the hectic week of economic announcements daily swings by weeks end amounted to very little as the Australian dollar once again failed to break free of its recent range between 1.04-1.05 when compared against its US Counterpart. Reaching weekly highs just short of the 1.05 mark overnight on Friday a positive US unemployment read could not overshadow ongoing US Fiscal cliff fears. Opening this morning at a rate of 1.0482 the market’s reaction to underlying data is likely to remain muted until Congress reaches an agreement.
We expect a range today of 1.0450 – 1.0500
New Zealand Dollar
Risk sentiment remained in favour of the New Zealand dollar on Friday after figures showed the US economy added more gains jobs than expected in November. Trading as high as 0.8334 against the Greenback further gains were capped after consumer confidence in the world’s largest economy slumped on fears the US Fiscal cliff would not be avoided. Opening this morning solid above the 83 US Cents mark, further gains above 0.8350 appear unlikely in the short-term as investors appear set to keep recent ranges intact.
We expect a range today of 0.8310 – 0.8370
Great British Pound:
Increasing fears that Britain’s economy is headed for its first ever triple dip recession in figures released on Friday Factory Output contracted by 1.3 percent in October, a much greater dip than expected. Highlighting just how weak the manufacturing sector is this was enough to see the Great British Pound sold down to an overnight low of 1.6000 against its US Counterpart. Receiving a much needed boost, a positive unemployment read in the US did support a move back to opening levels closer to the 1.6040 mark. Meanwhile this morning the Sterling opens weaker against both the Australian dollar (1.5289) and the New Zealand dollar (1.9254).
We expect a range today of 1.5260 – 1.5320
Majors:
Clinging to hopes that US Lawmakers will be able to reach a compromise, so much of the market’s direction is now being dictated by questions of will they, won’t they be able to avoid a fiscal deadlock leading up to a period of reduced volumes. Whilst the sticking point still remains the issue of increased taxation levels for higher income earners, so far the signals have been mixed. Providing some support for the worlds reserve currency on Friday the US economy added 146 000 new jobs in November, comfortably beating the estimated figure of 90 000. With the underlying unemployment rate dropping from 7.9 % to 7.7%, finally it appears the US Federal Reserve is starting to see some reaction given the record levels of stimulus that have been pumped into the world’s largest economy. Jumping across to Europe and the shared unit fell steadily from week mid-week after the ECB lowered its economic forecast for the region and Policy Makers hinted towards future interest rate cuts to help soften the blow. In what proved to bad news for the currency, the Euro, after trading above 1.3100 earlier in the week touched lows of 1.2875 against its US Counterpart. Meanwhile this morning the Euro currently swaps hands at a rate of 1.2926.
Data releases
AUD:
Home Loans m/m
NZD: Manufacturing sales q/q
JPY:
Final GDP q/q, Consumer Confidence
GBP: BOE Gov King Speaks
EUR:
French Industrial Production m/m, Italian Industrial Production m/m, Sentix Investor Confidence
USD:
No data today