:: 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 0.9175 to 0.9250
:: Great Britain Pound: With the weeks U.K economic data out of the way the Pound Sterling continued to bounce back consolidating gains above 1.6 made in early Europe to trade within a whisker of 1.63 against the Greenback. The main catalyst for the move was speculation that the Bank of England may pause their asset purchasing program after a senior central bank official was rumoured to have said he would prefer to have the option of doing more at a later date if necessary. This comes on the back of earlier comments from Deputy Governor Bean who said recent rises in asset prices may be a sign that the program is working. This morning sees the Pound open near its highs at 1.6270 and 1.7675 against the U.S and Australian dollars.
- We expect a range today in the GBP/AUD rate of 1.7575 to 1.7725
:: New Zealand Dollar: The Kiwi dollar roared higher yesterday following a massive 1.3% rise in consumer prices during the third quarter. Economists had been expecting a rise from 0.6% in Q2 to around 0.8% in Q3 with the unexpected result sending NZD/USD up from 0.7390 moments prior to the announcement to an early offshore high around 0.7480. Momentum dissipated somewhat overnight following some strengthening in the Greenback and it finds itself exchanging at 0.7435 this morning. It is expected the Kiwi will continue to remain well supported on pullbacks with key technical levels at 0.7350 and 0.7250.
- We expect a range today in the NZD/USD rate of 0.7385 to 0.7485
:: Majors: The Euro drifted lower from early offshore highs near 1.4970 against the Greenback following the unrevised -0.3% annual CPI figure for the region. In the U.S however inflation data surprised the market with a 0.2% monthly increase in core CPI, excluding Food and Energy which are considered to be the most volatile components, above forecasts for an unchanged +0.1% result. The initial reaction saw funds flow back into the safe haven of U.S dollars taking EUR/USD back to 1.4850 and USD/JPY to a high of 90.70. On a positive note for the U.S economy weekly jobless claims fell more than expected by 10,000 to 514,000; a sign that job losses are beginning to moderate somewhat boosting confidence in financial markets. With equity markets in North America finishing up slightly investors stepped in to trim back gains in the Greenback and EUR/USD opens this morning back above 1.49 at 1.4930 in Asia.
:: Data Releases:
- AUD: No Data Expected
- NZD: No Data Expected
- USD: Aug TIC Flows, Sep Industrial Production & Oct Prelim Uni of Michigan Confidence
- GBP: No Data Expected
- EUR: Aug Trade Balance
- JPY: No Data Expected
- CAD: Sep CPI