Australian Dollar: Intraday support at 0.9030 held firm in local exchange yesterday with strong Chinese Trade data giving the Aussie another boost towards 91 cents. Offshore investors took the AUD/USD to a high around 0.9150 with optimism on the global recovery, following higher than forecast U.S Retail Sales data, continuing to drive sentiment on commodities and commodity based currencies like the AUD. Underlying support for the currency is expected to continue whilst the Greenback remains weak with today's trade likely to be dictated by comments from RBA Governor Stevens, scheduled to speak on the West Coast.

- We expect a range today in the AUD/USD rate of 0.9100 to 0.9185

Great Britain Pound: The Pound Sterling continued its recent climb higher against the Greenback trading as high as 1.6025 overnight. The main catalyst for the move was better than forecast U.K employment data with the number of people seeking work in the three months through to August, as measured by the 3mth ILO unemployment rate, increasing by the smallest amount in a year. The ONS (Office for National Statistics) also announced a 20,800 rise in jobless claims during September, less than economist predictions for an increase to around 24,500. After exchanging above 1.6 in Europe the GBP/USD drifted back to this morning's opening level of 1.5970 whilst the GBP/AUD cross rate is relatively unchanged at 1.7465.

- We expect a range today in the GBP/AUD rate of 1.7400 to 1.7550

New Zealand Dollar: The Kiwi attempted an approach towards last week's highs of 0.7450 overnight but fell short of the mark, topping out around 0.7430 before pulling back to this morning's open of 0.7380. The move higher began yesterday from 0.7320 following the announcement that the RBNZ will begin removing some of the emergency liquidity facilities introduced during the onset of the financial crisis last year with strong REINZ annual House Price data also adding to demand. The main highlight for the week's domestic N.Z data comes this morning with the release of third quarter inflation with forecasts for an increase from 0.6% the previous quarter to around 0.8%.

- We expect a range today in the NZD/USD rate of 0.7325 to 0.7425

Majors: Better than expected trade data out of China saw the Greenback retreat once again dropping from levels near 90 against the Yen to an Asian low of 88.82 yesterday. As expected the Bank of Japan kept interest rates on hold however the market was somewhat disappointed the central bank did not make a formal decision to end its programs of purchasing corporate debt and as such USD/JPY bounced back to 89.50. The move out of U.S dollars into Euro continued to gain pace despite poor Euro-zone Industrial Production data peaking near 1.4950 overnight. Buoyed by stronger than forecast Retail Sales data out of America U.S equity markets also stoked optimism in the sustainability of the economic recovery with the Dow Jones Industrial trading up around 1.5%; above the psychological 10,000 mark for the first time in a year. The minutes to the September FOMC meeting surprised a few analysts with the news that some Fed members considered expanding the 1.25 trillion dollar mortgage backed securities purchase program in order to fend off a possible pullback in the economic recovery. Investors are now looking forward to more key data out of the U.S this evening with the release of September inflation data expected to take centre stage.

Data Releases:

  • AUD: Oct Consumer Inflation Expectations & RBA Governor Stevens Speaks
  • NZD: Q3 CPI & Sep Food Prices
  • USD: Sep CPI, Oct Empire Manufacturing & Oct Philadelphia Fed
  • GBP: No Data Expected
  • EUR: Sep CPI, Oct Empire Manufacturing & Oct Philadelphia Fed
  • JPY: Aug Industrial Production, Aug Capacity Utilisation & BoJ Monthly Report
  • CAD: Aug Manufacturing Shipments

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