The Australian dollar has enjoyed a solid turn around over the past 24 hours rallying considerably when compared against its US Counterpart. Rebounding well after economic data over the weekend showed signs of weaker growth in China the Australian Dollar touched a high of 1.0279 overnight, up from an opening level of 1.0200. Triggering the move higher the rally in the Greenback over the early parts of this week appears overdone with the US Dollar Index falling from a seven month high. With US Stocks continuing there strong advance overnight the Aussie dollar has maintained its momentum this morning as it opens stronger at a rate of 1.0277.
We expect a range today of 1.0240 – 1.0300
New Zealand Dollar
The New Zealand regained lost ground against its US Counterpart last night having fallen notably earlier in the week. With the Standard & Poor’s 500 Index edging towards a record high, global risk sentiment remained positive helping the prospects of the higher yielding asset. Moving to an overnight high of 0.8282 against the Greenback a weaker US Currency further helped the cause of the Kiwi. Given the lack of economic data expected out early in this week European happenings as well equity and commodity price movements should be closely monitored. Meanwhile this morning, following a relatively muted 24 hour period the Kiwi is stronger as it currently buys 82.75 US Cents
We expect a range today of 0.8240 – 0.8300
Great British Pound:
There has been very little change in the Great British Pound over the past 24 hours with investors still unwilling to take the Sterling higher. Trading in a tight range of (1.4864 – 1.4942) when compared against the US Dollar, despite UK Stocks which advanced for a third consecutive day a credit downgrade for neighbouring Italy did little to help its prospects. Opening this morning unchanged at a rate of 1.4919 signs of underlying weakness are amplified as witnessed by a drop of around one cent when traded against the Australian dollar (1.4515) and the New Zealand dollar (1.8025).
We expect a range today of 1.4480 – 1.4540
Currency markets have stopped to take a breath over the past 24 hours following the large moves witnessed early in the week as a result of the impressive US labour market figures. Helping a handful of major crosses in comparison, strength in the US Dollar petered out overnight emphasises that whilst the drop in unemployment was a step in the right direction for the world’s largest economy, economic indicators still need to improve considerably and consistently in order for the US Federal Reserve to pull out of ongoing easing measures. Making headlines overnight Fitch Ratings agency downgraded Italy, lowering its government bond rating to BBB+ from A- with a negative outlook, only three levels above junk. Reminding markets that Europe’s problems remain far from solved it comes a as a surprise to see the Shared Unit gain ground overnight, albeit propped up by a weaker Greenback. Rallying to highs of 1.3052 we open this morning still comfortably above the 1.3000 mark at a rate of 1.3048. In other notable moves yesterday the USD/JPY continued its march forward and with the minutes from the BOJ’s most recent meeting due to be released this morning further price swings are likely. This morning see’s the USD/JPY opening stronger at 96.25.
NAB Business Confidence
NZD: REINZ HPI m/m
GBP: Manufacturing Production m/m
Germans Final CPI m/m, German WPI m/m
NFIB Small Business Index, Federal Budget Balance
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