Daily Forex Forecast 10/09/2012

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By Michael Judge | October 9, 2012 9:09 AM EST

Australian Dollar
Following some heavy falls late last week the Australian dollar consolidated yesterday bouncing off bottom side support of 1.0150 against its US Counterpart. With US Markets remaining closed during the offshore session due to the Columbus Day Public Holiday highs were witnessed around the 1.0220 mark as leaders throughout Europe met in Luxemburg to discuss the regions ongoing debt crisis, specifically the establishment of a banking union as well as the conditions associated with a Spanish bailout. On the outlook this week, US third-quarter earnings season is due to kickoff this evening with all eyes locally fixed on Labour Market figures which are due for release Thursday. Meanwhile this morning the Aussie dollar opens in positive territory currently trading at a rate of 1.0191 against the Greenback.

We expect a range today of 1.0160 – 1.0220

New Zealand Dollar
The New Zealand dollar initially fell yesterday after the World Bank cuts its growth forecast for East Asia, adding to fears that nations such as China will struggle to meet their projected growth levels over the comings 12 months. Dropping to a session low of 0.8148 against its US Counterpart it wasn’t all bad news for the Kiwi which received some much needed support after European finance ministers announced a full-time 500 billion euro fund to help bailout nations struggling with ongoing debt repayments. Combining fears of softer growth with the likelihood Europe is once again set to drag markets through the mud over the coming week the New Zealand dollar has done well to bounce from its early lows finding around 30 basis points of upside to open stronger this morning buying 81.90 US Cents.

We expect a range today of 0.8160 – 0.8230

Great British Pound:
Declining stocks, a reduced global growth forecast by the IMF, a weak Industrial output result in Germany combined with ongoing debt talks throughout Europe have all added to some noticeable Sterling weakness over the past 24 hours. Falling a full cent, the Great British Pound touched lows of 1.6020 against its US Counterpart recovering only slightly to open well in negative territory this morning at 1.6025. Support is likely to kick in around the 1.60 mark this evening as investors await the release of Manufacturing and Trade Balance figures locally. Meanwhile on the cross rates this morning the picture doesn’t get any prettier as the Sterling opens lower by a full one and half cents against both the Aussie (1.5718) and the Kiwi (1.9557)

We expect a range today of 1.5680 – 1.5750

Majors:
Europe is once again likely to dominate the state of play over the coming week as Euro-zone finance ministers meet in Luxembourg in an attempt to firewall the broader region from ongoing fears of contagion. Adding to the Euro-zones defences overnight Policy Makers announced a full-time 500 billion euro fund to help bailout-ravaged nations with further confidence being expressed that the fund will not need to be used anytime soon. Falling to a session low of 1.2967 against its US Counterpart, the shared unit appears a little heavy when trading above the critical 1.30 level as investors appear reluctant to push it higher as talks continue this week. In what is shaping up as choppy week for global markets investors also remain nervous ahead of the US third-quarter reporting season which is set to commence this evening.

Data releases

AUD:
NAB Business Confidence, RBA Deputy Gov Lowe Speaks

NZD: REINZ HPI m/m

JPY:
BOJ Gov Shirakawa Speaks

GBP: Manufacturing Production m/m, Trade Balance, Industrial Production m/m

EUR:
ECB President Draghi Speaks, ECOFIN Meetings

USD:
No data today

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