Daily forex forecast

Australian Dollar: The festive season has proved to be no deterrent for the Australian Dollar with the commodity currency rallying to highs near 1.0150 as of yesterday’s North American session. However with European policy makers maintaining a cautious outlook and US Consumer Confidence falling month on month, the Aussie’s rally stalled and the Greenback reclaimed some ground. Falling back below 1.0100 we open trade at 1.0090 and although local markets are open today, the economic docket holds nothing expected.

We expect a range today of 1.0060 – 1.0140

New Zealand Dollar: Risk sentiment has stayed the primary driving force of the commodity block over the holiday period and the New Zealand Dollar has traded accordingly. Pushing through to highs near 0.7580 the Kiwi took advantage of Greenback weakness, although as the rally lost steam it fell back below 0.7550. Recovering better than its peers, the NZ dollar is testing 0.7570 at today’s open and is also pushing through 0.7500 against the Aussie dollar.

We expect a range today of 0.7540 – 0.7610

Great British Pound: The Great British Pound rallied momentarily through 1.5500 as the Greenback remained under pressure throughout the holiday weekend. Also lending support to the Pound was a Credit Suisse report showing that monetary policy expectations may aid the currency in the event of Europe concerns and risk aversion. The rally did falter as the risk trade took a hit with US Consumer Confidence falling and the ECB maintaining a cautious outlook for recovery. Falling over a cent Sterling now trades at 1.5380 against the Greenback, and ongoing antipodean strength leaves the Pound 1.5230 against the Australian Dollar and 2.0310 against the Kiwi.

We expect a range today of 1.5160 – 1.5290

Majors: Weakness in the US Dollar has persisted over the course of holiday trade with the Euro rallying to highs of 1.3270 and the Yen nearing 81.80. However with concerns for the Euro-zone still in the forefront of investors’ minds and US Consumer Confidence taking a hit, falling almost 2 points from the previous month, the rally looks to be short-lived. EUR/USD embarked on a reversal to test support down around 1.3100 and USD/JPY climbed back above 82.0 to briefly touch 82.40. With the markets to remain thin for this week, today’s events to watch are the USD Treasury Currency report and Japanese manufacturing PMI.

Data releases

AUD: No data due for release

NZD: No data due for release

JPY: No data due for release

GBP: Housing Equity Withdrawal q/q

EUR: German Prelim CPI m/m; M3 Money Supply y/y

USD: Treasury Currency Report

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