OzForex Daily Commentary - 09/11/2009

:: Australian Dollar: The Australian Dollar opens higher on Monday at US92 cents after the Reserve Bank of Australia (RBA) upgraded economic growth forecasts on Friday and U.S. unemployment came in worse than expected. The Aussie traded in a one cent band over the previous session (0.9090 - 0.9197) and was underpinned after the RBA said in its quarterly statement on monetary policy that GDP is set to expand by 1.75 per cent by the end of 2009 and to 3.25 per cent by the end of 2010. Markets viewed this as a sign that interest rates may need to rise for a third consecutive month in December. Meanwhile, the greenback weakened against several of its major rivals after the unemployment rate ballooned to 10.2 per cent in October reinforcing speculatio n that U.S. interest rates will need to remain at the current low levels well into next year.

- We expect a range today in the AUD/USD rate of 0.9140 to 0.9260

:: Great Britain Pound: Pound sterling opens little-changed against the greenback at 1.6650 after U.K. producer prices rose for an eighth consecutive month in October. The prices of goods at factory gates rose 0.2 per cent largely on the back of higher fuel costs but indicated to financial markets that U.K. businesses are finding ways to pass on rising costs as the recession shows signs of abating. During the last session on Friday, the pound traded between a low of 1.6516 and a high of 1.6635. Meanwhile, the pound is weaker against both the Australian Dollar (1.8020) and the New Zealand Dollar (2.2700).

- We expect a range today in the GBP/AUD rate of 1.7940 to 1.8160

:: New Zealand Dollar: The New Zealand Dollar opens the new week marginally higher at 0.7295 against the U.S. Dollar after another session of consolidation. During local trade on Friday the unit marked time ahead of key U.S. payrolls data moving between a low of 0.7192 and a high of 0.7225. The eagerly-awaited U.S. data revealed an unemployment rate of 10.2 per cent which sent the greenback lower against its major rivals as speculation was reinforced that U.S. interest rates will need to remain at the current low levels well into next year.

- We expect a range today in the NZD/USD rate of 0.7250 to 0.7360

:: Majors: The big dollar fell against the Japanese Yen (89.80) and is little-changed versus the Euro (1.4880) as the U.S unemployment rate increased to 10.2 per cent. The data adds to uncertainty over the recovery and reinforces speculation the Federal Reserve will keep borrowing costs near zero into 2010. The greenback initially rallied on the news as demand for riskier assets took a brief dive, however the gains were short-lived and it didn''t take long for market participants to once again turn their attention to yield. Meanwhile, the Canadian Dollar (1.0732) dropped as much as 1 per cent on Friday night after an unexpected fall in employment pushed the jobless rate to 8.6 per cent.

:: Data Releases:

  • AUD: Housing finance, Sep; ANZ job adds, Oct
  • CAD: Housing Starts, Oct
  • EUR: Trade Balance, Industrial Production, Sep
  • GBP: No data today
  • JPY: No data today
  • NZD: QV House Sales, Oct
  • USD: No data today

:: Note: The above exchange rates are based on interbank rates. If you are considering a transfer then please login, register or call us for a live dealing rate.