Daily forex forecast - 8/2/2011
Australian Dollar: Disappointing retail sales numbers pushed the Australian Dollar down towards 1.0100 during yesterday's domestic session. However, the move lower was short-lived and the weaker-than-expected reading in December (+0.2 per cent) was offset somewhat by a 12th straight monthly rise in the ANZ Job advertisement series.
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The Aussie hit an intraday high of 1.0140. During the offshore session, the unit moved to a high of 1.0160 ahead of this morning's opening level of 1.0138. Sentiment remains positive for the Aussie at the moment, attracting buyers thanks largely to our high yield at a time when interest rates in the United States, Europe and the UK are at record lows.
We expect a range today of 1.0115 - 1.0185
New Zealand Dollar: Traders were content to play the ranges yesterday with the kiwi moving in a narrow range between 0.7690 and 0.7710 during the Asian session. Helping to keep a lid on the local unit was the release of Paymark's annual retail sales figures which revealed growth of just 3.2 per cent in January, well below the 3.9 per cent annual growth reported in December. During the offshore session, the kiwi moved between a low of 0.7685 and a high of 0.7724. The kiwi opens at 0.7710 this morning against the greenback and largely unchanged at 0.7585 against the Australian Dollar.
We expect a range today of 0.7685 - 0.7730
Great British Pound: Pound Sterling moved higher overnight against the greenback (1.6116) and the Euro (0.8432) on speculation interest rates will need to rise due to above-target inflation. The Bank of England meets this Thursday to discuss monetary policy and rates are widely tipped to remain on hold.
However, some members of the policy committee are becoming concerned about the impact of doing nothing about inflation which reached 3.7 per cent in December. Meanwhile, the pound is little-changed against the Australian Dollar (1.5900) and marginally weaker against the New Zealand Dollar (2.0900).
We expect a range today of 1.5850 - 1.5940
Majors: The greenback has held onto its recent gains overnight as yields on U.S. 10-year treasuries rose amid continuing strong economic reports. The U.S. unemployment rate has dipped to 9 per cent last Friday and in data released just moments ago, U.S. consumer credit rose by US$6.1bio in December. This was the third consecutive monthly rise and higher than market expectations which has helped push the big dollar to a one-week high against the Japanese Yen at 82.28. Meanwhile, the Euro hit an intraday low of 1.3507 after German factory orders fell 3.4 per cent in December, worse than the 1.5 per cent tipped by most economists.
Data releases
AUD: NAB Business Confidence, Jan
NZD: No data today
JPY: Current Account balance, Dec
GBP: RICS House Price balance
EUR: German retail sales; Industrial Production, Dec
USD: No data today