IG Markets, Bell FX Currency Outlook: The Australian Dollar has maintained its overnight gains trading within the range of USD1.0489 to 1.0500 USD at the start of the trading day.
Australia: The attractive pace of the Australia currency comes from AUDJPY, which had risen ¥99.2 overnight, and is honing in on the recent high of ¥99.97, according to IG Markets strategist Evan Lucas.
Japan's stimulus program gave some luster to resource-based companies that have Asian focus led by Australian resource companies exporting energy and fuel alternatives, Oil Search Limited (ASX:OSH) and Santos Ltd. (ASX:STO).
If this level is broken, then the July 2008 high of ¥104.50 is well and truly on the cards, and will take some of the shine off these Asian-focused exporters, Mr. Lucas of IG Markets explains.
He notes, however, that the push-back for exporters saw AUDUSD jump 0.3% overnight and is now within 0.1% of the two-month high.
Analysts are now betting on another rate cut from the Reserve Bank as a reaction to Governor Stevens' 'no comment' speech at the annual ASIC conference on Tuesday.
Based on data collected on the swaps market, there is an 11 % chance of a rate cut next month.
The Aussie has shown relative strength against other currencies EUR, GBP and JPY, Bell FX said.
The local focus this morning will be on the RBA's Financial Stability Report, due at 11.30am.
Majors. The US data was in line with expectations, and the comments out of Europe were trying to smooth over the Cyprus issue. Finally, Cypriot banks are expected to open tonight - watch out for the queues as deposit holders scramble to get their cash out of the bank.
The divergence between the U.S and Euro zone economies was further underscored by stronger than expected data on U.S home prices and new orders for durable goods.
Meanwhile weak U.K retail sales data reminded investors about the gloomy economic outlook. The GBP strengthened last week after decent economic data lessened the chances of a recession and as problems in the Euro zone resurfaced, prompting a switch to U.K assets. Various data is being released in the Eurozone and the US.
27 MAR AU RBA Releases Financial Stability Review
NZ ANZ Business Confidence Mar
EU Euro zone Consumer Confidence Mar
UK Current Account Q4