Australian Dollar: The Aussie is relatively unchanged this morning after mixed data has seen us trade in a 50 point range for the last 24 hours. We opened yesterday looking fairly week following a poor US session and concerns over the US fiscal cliff but this was turned around with the release of local employment data late morning. The economy added 10,700 jobs last month according to the ABS report and there was also a revise up of the September numbers to 15,500, this resulted in unemployment rate printing at 5.4%. Economists were generally predicting no jobs added and increase in the unemployment rate to 5.5%, this adds further speculation that the RBA will stay on hold again next month dragging the Aussie to eventual highs of 1.0430 during our session. Looking ahead today were have enough Chinese data to keep the markets occupied with inflation, PPI, Industrial Production and Retail sales all due out at various stages through the day. With markets still relatively depressed we would need some strong figures to drag us beyond recent 1.0440 highs, while this morning we open at 1.0405.
We expect a range today of 1.0365 – 1.0450
New Zealand Dollar: The NZD has taken a battering in the last 24 hours with overseas events combining with poor local employment data to drag us towards 0.8150. Results released from Statistics New Zealand yesterday revealed that the economy lost 0.4% of jobs last month sending the unemployment rate to 7.3%, the highest in more than 13 years. Given this release and recent inflation data there are some economists calling for a rate drop when the central bank next meets, however comments from Wheeler on Wednesday may suggest otherwise. Even still the kiwi is noticeably weaker against most of its counterparts, with AUD/NZD at near two month highs trading at 1.2770 and NZD/JPY back below 65. Today we have local Housing Price Index and Card Spending but most of the direction will be taken from the Chinese data staggered throughout today and tomorrow. The NZD/USD opens at 0.8149.
We expect a range today of 0.8100 – 0.8190
Great British Pound: Last night the main focus for the pound was the Bank of England rate decision and accompanying Asset Purchase announcement and as generally expected the central bank kept rates on hold and voted to halt the expansion of its bond-buying program. Most economists predicted that Governor King and his colleagues would vote to leave the bond buying program at its current levels effectively admitting that we may have reached the end of what quantitative easing can do to boost the economy. On the currency front the GBP recovered earlier losses that resulted from negative comments out of Europe in regards to Greece and the Eurozone economy as a whole. The bounce back from lows below 1.5940 back up to 1.5990 also coincided with strong moves against the EUR with EUR/GBP reaching 6 week lows of close to 0.7960. The sterling opens this morning relatively unchanged against the Aussie currently at 1.5360, while GBP/NZD has picked up some ground and is currently pushing towards 1.9615.
We expect a range today of 1.5300 – 1.5380
Majors: After such big movements on Wednesday it was not surprising that the markets settled down on Thursday somewhat. Risk aversion was still playing on the markets though as the concern of the US fiscal cliff took headlines. During Asian trade yesterday the announcement came that the Greek Prime Minister Antonis Samaras had achieved the required votes in Parliament to enact the latest rounds of austerity measures but the market’s reaction was somewhat tempered by the resulting protests that followed in the streets. Heading into the European session the ECB kept rates on hold as widely expected but it was comments from European ministers at the time of release that sent the EUR to a two month low against the USD. The ECB President Draghi was quite dovish in his comments on economic recovery, and there was also talk of a delay on the release of further bailout funds to Greece. The Euro dropped to lows below 1.2725 before creeping higher to open this morning at 1.2750. Elsewhere we had some positive data out of the US with Initial Jobless claims dropping to 335k and Trade Balance narrowing more than expected to -41.5B but the markets generally ignored this with the JPY continuing to strengthen on risk flows and we find USD/JPY at 79.40.
AUD: No data today
NZD: Housing Price Index, Card Spending
JPY: Japan Money Stock
GBP: Trade balance
EUR: German CPI
USD: Uni. Michigan Confidence