Daily forex forecast

Australian Dollar: The Australian Dollar continued to hold above the 99 cents mark yesterday in local trade despite there being no domestic data to drive direction. Fears of European Sovereign Debt spreading to Spain and Portugal and potential credit downgrades to Euro debt continue to dominate the newswires in the lead up to Christmas. Lower than expected readings of US GDP and Existing Home Sales did little to dampen investor appetite for high yielding assets and this saw the Aussie make a move towards parity once again. There is no local data scheduled for release today.

We expect a range today of 0.9920 to 1.0020

New Zealand Dollar: The Kiwi spent most of intraday trade pegged in a 50 basis point range (0.7400 – 0.7450) with movements generally limited as traders begin to square up prior to leaving for their Christmas holidays. News out of NZ yesterday included the release of the Current Account, which ballooned out from -$0.99 million to –$ 1.77 billion in the three months to September 30. There is growing speculation that growth in NZ is stalling and this will be confirmed with today’s release of third quarter GDP (Gross Domestic Product), with the number expected to come in at a modest 0.1% quarter on quarter. The Kiwi is changing hands at 1.3460 against the Australian Dollar.

We expect a range today of 0.7375 to 0.7475

Great British Pound: The release overnight of the minutes from the Bank of England’s last monetary policy offered no surprise to the markets with Andrew Sentance again voting for interest rates in the UK to be lifted. Other news out of the UK overnight included third quarter GDP (actual 0.7% ; 0.8% previous) and the Current Account (actual – GBP8.1 billion ; -GBP7.4 billion). The release of the data sent the Pound down to a low of 1.5352 against the US Dollar with many forecasting growth to continue to slip as the government implements its biggest budget squeeze since World War II. The Pound is currently trading at 1.5350 against the Australian Dollar and 2.0680 against the New Zealand Dollar.

We expect a range today of 1.5300 to 1.5400 Majors:

The Greenback is up against the EURO (1.3086), Pound (1.5370) and Japanese Yen (83.52) despite a disappointing reading in third quarter US GDP and Existing Home Sales which were released overnight. GDP came in at 2.6%, well below the forecast number of 2.8% again highlighting why it is important for the Federal Reserve to continue with its QE2 programme. Data out stateside tonight includes Durable Goods and New Home Sales with both expected to come in above forecast.

Data releases

AUD: No data due for release

NZD: Third Quarter GDP JPY: Bank Holiday

GBP: BBA Mortgage approvals

EUR: French Consumer Spending; Belgium NBB Business Climate

USD: Existing Home Sales

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