:: Australian Dollar: With no local economic data released yesterday the Australian dollar bounced around between 0.9320 and 0.9350 for the majority of the Asian day searching for direction. The directionless trade continued well into the evening and throughout the European session only coming to life in North American exchange. Consumer Spending data out of the U.S surprised to the upside triggering a surge in demand for equities and riskier assets in general which benefited the Aussie dollar. At its peak the AUD/USD was exchanging around the 94 cent handle for the first time since July 2008 and opens this morning in retreat from its highs at 0.9380. Today's release of the November RBA board meeting minutes are likely to keep the Aussie do llar well supported as the market looks for further clues on how aggressive the tightening cycle may be.
- We expect a range today in the AUD/USD rate of 0.9350 to 0.9420
:: Great Britain Pound: The Pound Sterling came under some selling pressure in early London exchange as UK property group Rightmove reported a 1.6% decline in its House Price Index for the month through to mid November. After drifting to an overnight low of 1.6670 however GBP/USD gained upside momentum following concerns about the BoE stoking inflation were aired by one of the central bank's own policy makers Andrew Sentance. Adding to demand for the Cable was continued weakening in the Greenback following some upbeat consumer spending data suggesting the recovery in North America is well underway. This morning sees the GBP exchanging at 1.6835 and 1.7950 against the U.S and Australian dollars respectively.
- We expect a range today in the GBP/AUD rate of 1.7885 to 1.8000
:: New Zealand Dollar: Yesterday's Producer Prices data caught the local market by surprise as both input and output prices fell sharply during the third quarter. Analysts had been expecting relatively flat numbers however a 1.1% fall in input prices and a 1.4% decline in output prices triggered a sharp selloff in the Kiwi dollar. The initial reaction saw a dip from 0.7435 to an intraday low of 0.7395 however the move was short lived and calm was restored quite quickly as it settled back around 0.7430 for the majority of the Asian and European sessions. All eyes were keenly anticipating the U.S session and the impact consumer spending would have on risk appetite with the strong result boosting the NZD/USD higher once again. After peaking near 0.7520 the Kiwi opens this morning marginally below the 75 cent handle against the Greenback whilst exchange against the Aussie is slightly lower around 1.2500.
- We expect a range today in the NZD/USD rate of 0.7425 to 0.7525
:: Majors: Slightly softer than forecast monthly inflation figures for the Euro-Zone kept a lid on the Euro ahead of the psychological 1.5 level against the Greenback during European trade overnight. Economists had predicted a 0.3% increase during the month of October with the +0.2% result taking the annual headline CPI rate to -0.1%. Despite the slightly softer data EUR/USD held onto support around 1.4950 heading into U.S trade as the market keenly anticipated the release of North American consumer spending data. Advanced Retail Sales data for the month of October surprised analysts by rising 1.4% against forecasts of a 0.9% increase triggering a wild flurry of activity on the big dollar. The immediate reaction saw a brief spike in demand for the Greenback against the majors however as confidence in the economic recovery returned so too did the flight to riskier assets, and with equity markets rallying over 1% EUR/USD found itself above 1.5. Strong Japanese GDP data released in Asia yesterday had little effect on USD/JPY however in stark contrast last night's U.S Retail Sales data triggered a sharp decline. After an initial jump from 89.30 to 89.60 following the announcement strong selling emerged pushing it to a low of 88.75, the lowest level in over a month. The Yen opens this morning exchanging just shy of 89 against the Greenback with the volatility expected to continue in Asia today ahead of another big offshore session of data releases.
:: Data Releases:
AUD: RBA Board minutes
NZD: No Data Expected Today
USD: Oct PPI, Oct Industrial Production & Oct Capacity Utilisation
GBP: Oct CPI & Oct RPI
EUR: Euro-zone Sep Trade Balance & German Oct Wholesale Price Index
JPY: Sep Tertiary Industry Index
CAD: No Data Expected 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.