Australian Dollar:
The Aussie moved marginally higher yesterday following the RBA rate announcement and accompanying statement. As widely expected the RBA voted to keep interest rates on hold, but Stevens’ accompanying statement was more balanced than many expected, leading to an initial spike that quickly levelled off, leaving us to trade close to where we were prior to the release. Several key points were highlighted by commentators; with ‘inflation affording scope to ease if necessary’, ‘substantial easing of 2011 and 2012 still feeding through’ and an ‘improved outlook for non-mining investment’ providing enough balance to hold the currency in place for the time being. Many investors are now expecting the interest rate to remain unchanged at 3% for the remainder of the year. Overnight the Aussie weakened a fraction after better than expected US data saw the greenback strengthen against most of its counterparts. This morning we open around 1.0450 with trade balance due out at 11:30 am.

We expect a range today of 1.0415 – 1.0490

New Zealand Dollar:
The NZD has seen solid gains overnight, outperforming most of its major counterparts. Although only tier two data, yesterday’s ANZ commodity price figures were improved at 7.4%, beginning the rally that was bolstered by a falling Euro. EUR/NZD was pushed below the support of 1.5300, leading to the Kiwi being the main benefactor of flows out of the 17 nation currency as the pound also underperformed. A dairy auction overnight has also helped boost the Kiwi, with prices in the soft commodity increasing by 14.2%. This morning we find the NZD/USD close to last night’s high at 0.8420, while AUD/NZD is weaker at 1.2415. There is not much locally out today, but we do have some fairly important Chinese data that could drive the currency in Non-manufacturing PMI and HSBC Services PMI.

We expect a range today of 0.8380 – 0.8450

Great British Pound:
We find the pound lower this morning, trading just above 1.51 after some poor manufacturing PMI data out of the UK. After performing well during Asian trade, the pound fell against all of its major counterparts following news that PMI manufacturing data came in at 48.3 compared to expectations of 48.7. The pound had been trading close to 1.5250, which was forming as a strong resistance level, but disappointing data saw a reversal of recent gains that was then accelerated by stronger data out of the US. Tonight sees PMI construction data before tomorrow night’s all important Bank of England rate announcement. Meanwhile GBP/AUD is also significantly weaker at 1.4450 and GBP/NZD has broken below 1.80 and is now at 1.7950.

We expect a range today of 1.4420 – 1.4495

Majors:
We find the Euro weaker against the greenback this morning following a report showing Eurozone unemployment rising to record highs and PMI manufacturing remaining soft. Unemployment in the Eurozone is now at 12% after numbers for January were revised up and the February numbers remained the same with 33,000 people joining the unemployed list. As expected the highest jobless rates were seen in Greece and Spain, both above 26%, while Austria and Germany were the lowest at around 5%. In a separate report Manufacturing PMI was revised slightly higher to 46.8 but was still a fall from the previous month’s figure of 47.9. Over in the US there was some better data with US factory orders rising 3% compared to expectations of a 2.9% increase, with the durable goods component up by 5.6%. With the poor data out of Europe and stronger data from the US, we have seen EUR/USD moving back towards 1.28 after trading around 1.2875 during Asian trade yesterday. Meanwhile, the story of Cyprus continues with news some budgetary concessions have been granted by the Troika while at the same time Finance Minister Sarris has handed in his resignation. USD/JPY has also gained, approaching 93.50 as we get closer to the Bank of Japan announcement tomorrow.

Data releases:

AUD:
Trade balance, HIA New home sales

NZD No data today

JPY:
First day of BoJ

GBP PMI construction

EUR:
CPI estimate

USD:
ISM non-manufacturing, ADP employment