Daily Forex Forecast 6/6/2011
Australian Dollar: A stronger Euro and weak greenback across the board has propelled the Australian dollar to a three-week high late on Friday night of US107.74 cents. The unit opens at 1.0700 in Sydney this morning ahead of Tuesday's Reserve Bank of Australia policy meeting where interest rates are widely tipped to remain on hold at 4.75 per cent for the seventh straight month. The Aussie hit a 24-hour low of 1.0594 during early New York trade after a plunge in US jobs growth took the wind out of the sails of any currencies linked to risk and global growth. News late in the session that EU and IMF officials agreed to pay the next instalment to Greece under last years bailout package provided a boost to market sentiment. The Aussie opens weaker against the Euro at 0.7320.
We expect a range today of 1.0640 - 1.0750
New Zealand Dollar: With markets closed in New Zealand for a public holiday on Monday, the currency opens marginally softer against its greenback counterpart today at 0.8140. After hitting a 26-year high last Tuesday of 0.8264, the kiwi spent the remainder of the week trading between support around the US81 cent mark and resistance at 0.8218. The Reserve Bank of New Zealand meets this week and market participants expect the official cash rate to remain on hold at 2.5 per cent. Despite a slight pick-up in recent economic activity most analysts are not tipping a rate rise until the first quarter of 2012. Meanwhile, the kiwi opens marginally lower against its trans-Tasman rival at 0.7600.
We expect a range today of 0.8110 - 0.8190
Great British Pound: Pound Sterling opens higher today against the greenback at 1.6410. The currency fell early on Friday to an intraday low of 1.6285 after an index of UK services dropped more than economist's forecasts. The services gauge from Markit Economics and the Chartered Institute of Purchasing and Supply fell to 53.8 in May from 54.3 in April. Whilst weaker against the Euro (0.8900), the pound rallied to a high of 1.6437 against the US after EU and IMF officials agreed to pay the next instalment to Greece under last years bailout package provided a boost to market sentiment. Meanwhile, the pound opens steady against the Australian Dollar (1.5320) and higher against the New Zealand Dollar (2.0130).
We expect a range today of 1.5280 - 1.5345
Majors: Unemployment in the United States unexpectedly rose last Friday night to 9.1 per cent adding to signs the economic recovery has all but stalled. Jobs rose by just 54,000 last month whilst private-sector employment improved by 83,000, down from an average of 244,000 in the previous three months and the lowest gain since June 2010. The greenback strengthened marginally early on Friday as traders eschewed risk, however the gains were short-lived and the big dollar was sold heavily late in the session as news emerged that officials from the European Union and the International Monetary Fund agreed to provide debt-stricken Greece with further bailout funds. The agreement boosted market confidence that the regions nations will be able to meet their obligations. The Euro rallied to a one-month high against the dollar of 1.4641 and opens the new week at 1.4610. Meanwhile, the greenback opens at a 4-week low against the Japanese Yen at 80.20.
Data releases
AUD: ANZ job ads, May
NZD: Markets closed, Queen's birthday public holiday
JPY: No data today
GBP: No data today
EUR: Producer Price Index, April
USD: No data today