:: Australian Dollar: The Aussie dollar firmed in local trade yesterday with local equity markets recouping some of Friday's large losses. The move came despite a poor reading from the Housing Industry Association of Australia with the number of new dwellings sold in October falling by 6%. Direction came instead from an increase in risk appetite and a firming of odds for another interest rate rise by the RBA today following an estimated 0.3% rise in November inflation as reported by the TD Securities Inflation gauge. The AUD/USD hit a high near 92 cents in late trade and despite a second attempt to push through this level in Europe overnight it drifted lower and opens this morning back at 0.9155. Many economists had scaled back expectations of another rate rise today following the Dubai World news last week however OzForex puts the odds of an increase at greater than 50%.
- We expect a range today in the AUD/USD rate of 0.9030 to 0.9130
:: Great Britain Pound: After recovering some lost ground in Asia yesterday the Pound Sterling fell from its highs against the Greenback near 1.6600 overnight to exchange as low as 1.6380. With the majority of U.K economic data coming in around expectations it was the larger than expected falls in Consumer Confidence and Consumer credit that caught the markets attention and drove the GBP lower. This morning sees the Pound exchanging around 1.6450 and 1.7960 against the U.S and Australian dollars ahead of the RBA's interest rate decision which is sure to increase volatility on the cross rate.
- We expect a range today in the GBP/AUD rate of 1.8085 to 1.8125
:: New Zealand Dollar: A surprise 11.7% increase in N.Z Building Permits during October and a return to risk appetite in Asia yesterday helped the Kiwi rally back above the 72 cent handle. The move was relatively short lived however as profit takers in Europe kept a lid on any further advances pushing it back to support ahead of 0.7120. The NZD/USD spent the majority of the offshore session bouncing between 0.7120 and 0.7170 and opens this morning at the top end of this range exchanging at 0.7165 with further direction likely to come from news across the Tasman.
- We expect a range today in the NZD/USD rate of 0.7040 to 0.7140
:: Majors: The Euro strengthened in Asian trade yesterday as investors drew a big sigh of relief that U.S markets did not plummet on Friday and that the potential crisis in Dubai could be avoided. EUR/USD traded back above 1.5 peaking at 1.5080 with a stronger than expected Euro-zone CPI estimate for November adding to demand in early offshore exchange. Profit takers stepped in following news that Dubai World's property unit asked the Nasdaq Dubai to suspend its securities from trading until it could fully inform the market on its position. Jitters ahead of the U.S open pushed the EUR back to 1.4970 however with the Chicago PMI and Dallas Fed Manufacturing activity beating forecasts during November risk appetite firmed once again. The big dollar opens this morning around 1.5020 and 86.40 against the Euro and yen respectively with U.S housing and ISM data scheduled for release this evening sure to cause another increase in volatility.
:: Data Releases:
- AUD: RBA Rate Decision & Oct Building Approvals
- NZD: No Data Expected Today
- USD: Nov ISM Prices Paid, Nov ISM Manufacturing, Oct Pending Home Sales & Oct Construction Spending
- GBP: Nov Nationwide House Prices & Nov PMI Manufacturing
- EUR: Euro-Zone PMI Manufacturing (Nov Forecast), Oct Unemployment rate & Oct German Retail Sales
- JPY: Nov Vehicle Sales
- CAD: No Data Expected Today